The costs of hiring a worker generally differ in size from the firing costs. This article investigates optimal labour demand schedules for production and nonproduction workers of firms that operate under uncertainty and face asymmetric costs of adjusting their workforce. In the empirical part...

We test a q investment model for Belgium using a multivariate cointegration approach. The introduction of the degree of capacity utilization duc, in addition to investment and average q, is necessary to determine the cointegration space. This supports the idea that marginal q differs from...

To what extent can the persistence of very high unemployment rates in most of the European countries be attributed to the presence of high real interest rates ? This question, essentially addressed by the ‘customer market’ price)setting school, was very much debated in Europe these last...

This paper presents an intertemporal model in which the agents may face different quantity constraints resulting from technological rigidities, microeconomic uncertainty and market segmentation. Its main purpose is to derive the path of the unemployment rate, the rate of capacity utilisation and...

An exchange rate devaluation oriented to correct internal and external imbalances is considered in a tradeable/non-tradeable model where the domestic prices are rigid downwards and wages are set by unions. First, the policy is ineffective as long as there is an efficiency disjunction, i.e., the...

We extent Ramsey’s model to be in accordance with the facts that self-reported satisfaction levels are almost unrelated to economic prosperity, both across countries and across time. We assume that things are judged by the extent to which they depart from collective norms. Norms are based on...

We build a computable general equilibrium model with overlapping generations of agents and an endogenous growth specification à la Lucas. Two main issues are addressed: (i) to what extent does endogenous growth play a significant role in the face of policy reform and (ii) are the simulation...

We build a multi-sector model with wage bargaining and imperfect competition to analyse the links between wage interdependence and competitiveness. Quantity constraints together with union power, firm market power and wage externalities play a significant role in the determination of...

The standard efficient contract involving a monopolistic firm and a union has always been derived under the assumption that the firm operates efficiently, i.e. it uses fully its labor force. However, nothing constrains the firm to do so and production with under-utilization of labor may actually...

In a competitive overlapping generation model, underutilization of labor and equipment can be due to the combinaison of irreversibility of human capital, physical capital and technology with idiosyncratic productivity shocks. Irreversibilities and uncertainty generate an inefficient allocation...