This paper considers extension of the standard cobweb model in a market with local externalities. In contrast with the standard cobweb model, firms must forecast both prices and local quantities; Fourier analysis is shown to lead to new constructive stability and existence conditions for...

This paper is an attempt to account for the empirical results of Krueger and Summers (1988) which suggest significant inter-industry wage differentials. We derive a dynamic efficiency wage model where firms use their wage policy to reduce turnover costs. Industry wages are shown to be a positive...

This paper reviews a new approach to the design of unemployment policies. It focuses on polciies that have become an increasingly popular weapon against long-term unempoloyment, namely, policies that subsidize the hiring of the long-term unemployed. Whereas the existing literature usually...

The message of this paper can be summarized in two simple points: (i) A wide range of labor market institutions - including unemployment benefits, job security legislation and payroll taxes - have complementary effects on unemployment, (ii) Thus a correspondingly wide range of labor market...