We extend the finance-constrained economy proposed by Woodford (1986) to incorporate imperfectly insured unemployment, by introducing unions and unemployment benefits financed by labour taxation. We show that this simple extension of the Woodford model changes drastically its stability...

We introduce labour market imperfections (i.e. unions and the existence of a wage floor) in a finance-constrained monetary economy with heterogenous agents and increasing returns to scale due to labour and capital productive externalities. We find that indeterminacy emerges for empirically...

We analyse educational choices and earnings of individuals at two different levels in the Portuguese educational system. At each exit we consider two decisions: the decision to continue studying and the employment decision. We find empirical support for the existence of selectivity bias as the...

We consider a constant returns to scale, one sector economy with segmented asset markets, encompassing both the Woodford (1986) and overlapping generations models. We analyze the role of public spending, financed by (labour or capital) income and consumption taxation, on the emergence of...

We discuss the effects of unions in the labour market on steady-state multiplicity and welfare, and on the occurrence of local indeterminacy, local bifurcations and (stochastic and deterministic) endogenous fluctuations driven by self-fulfilling expectations. We consider an overlapping...

The central objective of this paper is to assess the empirical relevance of labour adjustment costs arising from institutional rigidities and to compare their importance across countries. It thus develops a simple dynamic bargaining model of the union monopoly type that, for the first time,...