The aim of this paper is to analyze and estimate salient characteristics of unemployment dynamics. Movements in unemployment are viewed as "chain reactions" of responses to labour market shocks, working their way through systems of interacting lagged adjustment processes. In the context of...

Conventional wisdom suggests that nominal, demand-side shocks have only temporary effects on real macroeconomic magnitudes and that the duration of their effects depends on the degree of nominal inertia. It is also argued that, in the absence of unit roots, temporary supply-side shocks also have...

In this paper we challenge the traditional labour market view, which argues that unemployment is determined in the long-term by its equilibrium rate, which in turn is affected by permanent shocks of some exogenous variables. In our empirical approach we decompose the dynamics of employment and...

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...

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...

The proposal involves the establishment of ?welfare accounts? for every person in a country. There are to be four accounts: a retirement account (covering pensions), an unemployment account (covering unemployment support), a human capital account (covering education and training), and a health...

This paper examines the movements in EU unemployment from two perspectives: (a) the NRU/NAIRU perspective, in which unemployment movements are attributed largely to changes in the long-run equilibrium unemployment rate and (b) the chain-reaction perspective, in which unemployment movements are...

In jüngster Zeit wurde eine Vielzahl von Kombilohnvorschlägen zur Bekämpfung der Arbeitslosigkeit gemacht (vgl. z.B. Sinn et al. 2006; Sachverständigenrat 2006). Diese sollen Abhilfe bei der persistenten Langzeitarbeitslosigkeit und den hohen Arbeitslosenraten bei Niedrigqualifizierten schaffen....

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....