Although there is a large literature on employment effects of earned income tax credits (EITCs) and unemployment benefits, less is known about wage effects. In our model the impact is via the net (after-tax) replacement rate. Using a panel of individuals from Sweden, we find a positive...

Using a large dataset covering all trade in military equipment over the period 1950-2007, we address the relationship between differences in polity and arms trade from a novel empirical perspective. We provide evidence on the determinants of link formation at the bilateral level by estimating...

Although many of the worst performing countries over the post-World War II period were autocracies, many of the best were likewise autocratic. At the same time, no long-lived autocracy currently is rich whereas every long-lived democracy is. This paper proposes a theory to account for these...

Using SIPRI data on all international transfers of major conventional weapons 1950–2007, we study the relationship between differences in polity and arms trade. To study whether states tend to trade arms within their political vicinity we estimate gravity models of the likelihood of trade at...

We investigate the impact of inflation targeting and central bank independence on wage formation and unemployment using a panel of 20 OECD countries from 1982-2003. The results suggest that monetary institutions matter for wage formation. Real wages are on average higher under inflation...

The likely impact of the EMU on the variability and level of employment is analysed. The major conclusions are: (1) Although an inflation-target regime will constrain monetary policy of a non-participant in the EMU, it still leaves considerable scope for exchange rate chages in the case of...

Membership in a monetary union (EMU) is likely to imply stronger incentives for nominal wage flexibility in the form of wage indexation and shorter contract length than non-membership. For example, EMU entry may cause a move from a nonindexation to an indexation equilibrium. But more wage...

It is a common view that labor market programs reduce unemployment and restrain wages by increasing the competition for jobs. The Swedish case is often advanced as a blueprint to follow. This article questions the conventional wisdom on the Swedish labor-market policies. It finds empirical...

Membership in a monetary union implies stronger incentives for nominal wage flexibility in the form of wage indexation and shorter contract length than non-membership. This counteracts the stabilisation policy cost of giving up monetary independence. But more wage flexibility is only an...

The Swedish experiences of the 1990s provide a unique example of how large-scale active labour market programmes (ALMPs) have been used as a means to fight high unemployment. This paper surveys the empirical studies of the effects of ALMPs in Sweden. On the whole, ALMPs have probably reduced...