The paper introduces the concept of a firm's normal employment level as a weighted average of past employment levels and it analyzes the impact of an incentive scheme in which a firm receives a reward (or pays a penalty) when it deviates above (below) its normal employment level. The result is...

The paper discusses the role of restraints in the economic System. The constraints may relate to different agents of the economic-system so that one may envision the economic system as a Set of hierarchical constraints with each layer.of constraints applying to a more disaggregated level of...