The paper analyzes a variety of government policies that can stimulate employment when unemployment is generated through the conflicting of interest between insiders and outsiders. It also provides guidelines for identifying policies that may be ineffective. We show how supply side policies can...

This paper has two aims. First, it provides simple theoretical models that highlight two channels whereby monetary shocks have permanent real effects and the interactions between these channels. Second, it presents an empirical dynamic model, covering a panel of EU countries, and derives the...

This paper shows that when workers have some market power and face substantial uncertainty concerning their productivity, it may be in their interest to formulate their wage claims with a view to the information thereby revealed. This learning behaviour may in turn be responsible for...

Do firms reduce employment when their insiders (established, incumbent employees) claim higher wages? The conventional answer in the theoretical literature is that insider power has no influence on employment, provided that the newly hired employees (entrants) receive their reservation wages....

This paper provides a critique of the 'unemployment invariance hypothesis', according to which the behavior of the labor market, by itself, ensures that the long-run unemployment rate is independent of the size of the capital stock, productivity and the labor force. In the context of an...

El trabajo analiza cómo la influencia de los sindicatos ejerce sobre los contratos de salarios y puede hacer que el mercado laboral pierda su capacidad de recuperación. La pérdida de esta capacidad elástica se describe de dos maneras, conceptuamente diferentes: i) Una tendencia a que los...

The paper surveys unemployment policies for advanced market economies and evaluates them by examining the predictions of the underlying macroeconomic theories. The basic idea is that, for the most part, different unemployment policy prescriptions rest; on different macroeconomic theories, and...

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This paper explores the optimal design of subsidies for hiring unemployed workers ("employment vouchers" for short) in the context of a simple macroeconomic model of the labor market. Focusing on the short-term and long-term effects of the vouchers on employment and unemplkoyment, the analysis...