This paper presents an innovation driven endogenous growth model, where firms and unions bargain over wages. We find that the degree of centralization of the bargaining structure plays a crucial rule for economic performance. Central bargaining, which incorporates the leapfrogging externality...

This paper argues that in a growing economy unemployment can be the cause of goods markets failures, even if these are purely transitory. As the economy grows, new firms wish to enter product markets. It may take some time, however, until their products are accepted on the market, which we model...

Economic growth is driven by structural change. Structural change does not come without a cost, the most evident social cost being high and persistent unemployment. This paper develops an economy with an endogenously expanding service sector, where the constant flow of workers in and out of...

Despite the European Commission’s concrete steps to integrate the national car markets and reduce car price dispersion, significant car price differences exist. Moreover, international differences in taxation of sales and registration of motor vehicles do not give rise to considerable...

We present a three sector OLG model with a homogenous output good that is produced with traditional or robot technology. The traditional sector produces with labor and capital, whereas the modern sector employs robots instead of labor. We find that little can prevent the ascent of a modern...

Space: the final frontier. This paper seeks to understand the spatial dimension of tax competition. We provide two novel contributions to the literature on tax competition. First, we present a spatial model of tax competition, which is an adoption of the Hotelling model of imperfect competition...