In this study we analyze the factors behind the Finnish unemployment shock of the 1990s. The analysis is based on labour demand, wage-setting and current account equations that form a structural labour market model. The results of this model are compared to those obtained from a reduced form...

The beginning of the 1990s witnessed the collapse ofthe Eastern European economies and a severe recession in some Western European countries. In most countries the economic difficulties have been milder than those experienced during the Great Depression of the 1930s. Finland is an exception to...

The paper investigates the employment effects of changes in interest rate, availability of credit, internal net worth, market power and debt-equity ratio. A model of an oligopolistic risk averse firm is used as an analytical framework, combined with a Nash bargain over wage. The analysis...