support these regions or sectors is to pay employment subsidies. We present evidence showing that capital subsidies are … empirically much more important than employment subsidies. We then discuss possible explanations for the dominance of investment …-firm bargaining also gives rise to underinvestment. In this framework, it turns out that an investment subsidy dominates an employment …

support these regions or sectors is to pay employment subsidies. We present evidence showing that capital subsidies are … empirically much more important than employment subsidies. We then discuss possible explanations for the dominance of investment …-firm bargaining also gives rise to underinvestment. In this framework, it turns out that an investment subsidy dominates an employment …

support these regions or sectors is to pay employment subsidies. We present evidence showing that capital subsidies are … empirically much more important than employment subsidies. We then develop a simple model with unemployment to explain this … investment subsidy dominates an employment subsidy in terms of welfare if there is bargaining over wages and employment on the …