This paper revisits the role played by myopia in generating a theoretical rationale for pay-as-you-go social security in dynamically efficient economies. Contrary to received wisdom, if the real interest rate is exogenously fixed, enough myopia may justify public pensions but never alongside...

Capital market imperfections make the future purchasing power of wage income risky. Therefore, current nominal wages may have intertemporal implications which affect wage determination. The influence of consumption risk on wage setting is analysed in a general equilibrium model with an...

The role of demand management policies is considered in an intertemporal model for a two-sector open economy with labour market imperfections causing persistent unemployment. Structural unemployment is shown to depend on demand management policies, although demand expansion need not in general...

Over the last 25 years the Danish economy has had difficulties in growing as fast as other EU countries and the United States. While the average growth difference is small, it signals that if this trend persists into the next century, Denmark will not be able to maintain its high position in the...

This paper addresses the question of the possible real side effects of exchange rate devaluation in a small dependent economy, with a specific empirical application to Jordan. A macroeconomic model is constructed on the basis of a number of stylized facts which characterize the Jordanian...

In this paper, the authors analyze how job security policies, which in practice result in higher firing costs, affect long-run employment and investment in a two-country model with free trade in goods and capital. The effects turn out to depend crucially on the preferences of trade unions and,...