Barely a day goes by without some expert telling us how the continental European economies are about to disintegrate unless their labour markets become more flexible. Basically, we are told, Europe has the wrong sort of labour market institutions for the modern global economy. These outdated...

This lecture provides a general framework for analysing unemployment. For inflation to be stable, there must be sufficient unemployment to prevent 'target real wages' exceeding 'feasible real wages'. Target real wages depend on bargaining systems, benefit systems, labour market policies and...

Most people with mental illness should be offered the choice of psychological therapy.

Treating mental illness should be a top national priority, especially as proven psychological therapies effectively cost nothing. Richard Layard explains how CEP research has led to a new deal for mental health - but much remains to be done. Mental illness has much greater economic costs than...

The rise in European unemployment is often blamed on increased mismatch between labour supply and demand- either by age, skill or region. To investigate this, we first develop models to explain differences in unemployment rates - both where labour supply is given and where it responds through...

This paper traces (a) the impact of credit expansion on inflation and (b) the impact of inflation on the real liquidity of households and enterprises. From April 1992 to September 1993 households paid an inflation tax equal to 13.3% of GDP and received almost no new credits. Enterprises received...

Russia has come near to hyper-inflation and pulled back from the brink. But the position is still delicate. In this paper we review the past history, and then what needs to be done and the difficulties of doing it. Russian monetary policy since the reform has gone through three phases - first...

Poland has tackled its economic problems with courage and, thus far, success. Hyperinflation has ceased, the well-chosen exchange rate has held, and wage behaviour has been responsible. A major recession is under way, and it must not become endemic. A big export effort is needed, followed with...

The Western media often depict the average Russian as starving and destitute. This is of course absurd. But hardship has increased since the reform for a substantial portion of the population. Average living standards have fallen and inequality has increased. How much? We begin by documenting...

Three main criteria should govern a privatisation plan: speed, fairness, and efficient control. From this view we derive our optimum scheme, though we recognise that in most countries it needs modifying to existing circumstances. 1. Privatisation should be by gift, not sale. But distribution by...