It is argued that increases in government spending that take the form of increases in government employment can have a negative impact on private-sector employment by increasing real wages. In fact, once the supply reducing effects of higher taxes needed to finance the increase in government...

In contrast to much recent work regarding the causes of European unemployment, in this paper we emphasize the importance of capital accumulation. But unlike the few previous studies which have examined the relationship between capital accumulation and unemployment, we argue that what matters for...

In this paper we use a model of vertical product differentiation to cast doubt on the general validity of the import demand function as specified in macroeconomic models. The empirical importance of our theoretical concerns is then established. According to our first hypothesis, the share of a...