Empirical evidence seems to indicate that economic growth since 1965 has varied inversely with natural resource abundance across countries. This Paper proposes a linkage between abundant natural resources and economic growth, through saving and investment. When the share of output that accrues...

This Paper provides microfoundations for wage compression by modelling wage-setting in a world of heterogeneous workers and firms. Workers are differentiated by observable innate ability. A high-ability worker confers on a firm an externality, since their ability raises the average level of...

The move to a pay-as-you-earn income tax system in Iceland in 1987-1988 made income earned in 1987 tax-free. Using a sample of 9,274 individuals for the years 1986, 1987 and 1988, we calculate the labour-supply response of this change and find that total labour supply rose by 6.7% in 1987 over...

We investigate two dimensions of investment in general human capital on-the-job: the number of workers trained and the intensity of training for each worker. In the benchmark case, we consider wage and training decisions made by firms in an imperfectly competitive labour market. The benchmark...

This paper uses county-level data to estimate the timing and magnitude of shifts in aggregate and regional British Beveridge curves. We find that these shifts coincide with the business cycle rather than with hysteresis effects or with changes in regional mismatch. This implies that the...

This paper is an empirical investigation of unemployment rate series in 17 countries. The timing and size of shifts in the mean rate of unemployment are estimated. The size of the shifts and the remaining persistence in the unemployment rate series are then related to institutional differences...

Does it always pay to install high-quality capital? Or could it possibly be more profitable to make investments that do not last too long? In this Paper we ponder the optimal rate of depreciation of physical capital, first in the Solow model and then in a model of endogenous growth with...

It is well known that workers in Europe appear to receive more firm-provided general training than their counterparts in the United States. Moreover, there is considerable evidence that firms, in many cases, pay for the general training, contrary to the predictions of Becker (1964). In important...

This paper diagnoses the symptoms of the Dutch disease in a two-sector stochastic endogenous growth model. A productive, low skill-intensive primary sector causes the currency to appreciate in real terms, thus hampering the development of a high skill-intensive secondary sector and thereby...

This paper presents a dynamic model that gives an account of some of the forms that the Dutch Disease can take through both product and labour markets. These involve an effect of primary sector output - through real wages and the level and volatility of real-exchange rates - on secondary sector...