The internet has given birth to an expanding number of shared virtual reality spaces, with a collective population well into the millions. These virtual worlds exhibit most of the traits we associate with the Earth world: economic transactions, interpersonal relationships, organic political...

We augment a standard tax model by concerns about tax equity: people get upset when labour is taxed more heavily than capital. Even the slightest concern for tax equity invalidates the common recommendation for small open economies that capital should remain tax-exempt. This holds for exogenous...

In this paper, we revisit the association between happiness and inequality. We argue that the interaction between the perceived and the actual fairness of the income generation process affects this association. Building on a simple model of individual labor-market participation under...

At the turn of the millennium three frequently cited potential causes of new challenges for wage p olicy in Germany are revisited in this study: skilled-biased technological progress, the increasing international integration of labor and product markets, and the monetary integration of the EMU....

In this paper I argue that profit-maximizing firms, even though they contribute to social welfare when they compete in the market, may not do so when they influence the political process. In particular, I suggest, through several examples from both the real world and from economic theory, that...

We provide evidence indicating that countries with well-developed social security systems do not necessarily face a trade-off between social spending and competitiveness. On average, countries that spend a lot on social needs score well in the competitiveness league. We investigate the...

Several European countries have reformed their labor market institutions. Incentive effects of unemployment benefits have been an important aspect of these reforms. We analyze this issue in a principal-agent model, focusing on unemployment levels and labor productivity. In our model, a higher...

We discuss metrics of globalization for individual economies as distance measures between fully integrated and trade restricted equilibria in economies initially operating under less than full integration with the global economy. Such metrics can be used to construct country globalization...

Multinational enterprises are often accused to have a preference for investing in countries in which the working populations' civil and political rights are largely disregarded. This paper presents an empirical investigation of the popular "political repression boosts FDI" hypothesis and arrives...