In this paper, we investigate how changes in the skill mix of local labor supply are absorbedby the economy. We distinguish between three adjustment mechanisms: through factorprices, through an expansion in the size of those production units that use the moreabundant skill group more...

The Phillips curve has flattened in Spain over 1995-2006: unemployment has fallen by 15percentage points, with roughly constant inflation. This change has been more pronouncedthan elsewhere...