This paper considers the shape of the production possibility set with a public intermediate good of the atmos phere type. The elements which tend to give rise to a concave product ion frontier are isolated from those which tend to generate a convex one. By using the notion of the production...

This paper incorporates equilibrium unemployment caused by efficiency wages into a monopolistic competition model of trade. Worker effort is treated as an endogenous variable that depends on the optimizing behaviour of firms and workers. Opening up trade induces firms to demand greater worker...

This paper integrates union bargaining into an efficiency model with imperfect monitoring of worker performance. The model is used to examine the effects of an increase in the benefit replacement ratio on wages, employment, and effort. It is shown that, in contrast to both standard shirking and...