We develop a model with a finite number of multi-product firms that populate an industry together with a continuum of single product firms, and study the dynamics of this industry that arises from investments in the invention of new products. Consistent with the available evidence, the model...

After the onset of the Eurozone crisis, Mediterranean economies (Greece, Italy, Portugal, and Spain) followed the example set by Germany, implementing structural reforms with the aim of restraining labor costs and transitioning to an export-led growth. Using input-output tables, this paper...

Despite the growing reliance on payroll taxation worldwide, there is limited evidence on the incidence of payroll taxes. I provide new evidence by examining the experience of Chile before and after the privatization of its Social Security system. This policy change led to a sharp exogenous...

Resource allocation within firms is essential for their growth. We investigate how labor costs affect firms’ internal spatial distributions (ISDs) by using Chinese administrative data. We find that the increase in the minimum wage promotes firms to open establishments in regions with lower...

Resource allocation within firms is essential for their growth. We investigate how labor costs affect firms’ internal spatial distributions (ISDs) by using Chinese administrative data. We find that the increase in the minimum wage promotes firms to open establishments in regions with lower...

This paper studies the price and employment response of firms to the introduction of a nation-wide minimum wage in Germany. Widely throughout the economy, affected firms responded by rapidly and frequently increasing prices without cutting employment. These decisions are strongly interrelated:...

This working paper was written by Wenlang Zhang (Hong Kong Monetary Authority) and Gaofeng Han (Hong Kong Monetary Authority).Labour markets in China have experienced remarkable changes in the past decade. In this paper we use above-scale industrial firm-level data of 2001-2008 to study how...

Against the backdrop of continuing adjustment in EU labour markets in response to the Great Recession and the sovereign debt crisis, the European System of Central Banks (ESCB) conducted the third wave of the Wage Dynamics Network (WDN) survey in 2014-15 as a follow-up to the two previous WDN...