The rise in European unemployment has inspired much new research on the causes and mechanisms of unemployment, analogous to the interest devoted to unemployment in the 1930s. The new research has to a large extent focused on wage-setting behaviour, as is revealed by the rapid growth of...

In this paper we explore the hypothesis that the Swedish malaise comes from the interaction of the Swedish welfare state with changes in the global marketplace. External commerce can expose Swedish workers in exporting and import-competing industries to competition from low-wage foreign workers...