We analyze labor market models where the law of one price does not hold-that is, models with equilibrium wage dispersion. We begin by assuming workers are ex ante heterogeneous, and highlight a flaw with this approach: if search is costly, the market shuts down. We then assume workers are...

In flow models of the labor market, wages are determined by negotiations between workers and employers on the surplus value of a realized match. From this perspective, this paper presents an econometric analysis of the influence of labor market flows on wage formation as an alternative to the...

This paper tests a version of Barro’s tax-smoothing model, which assumes intertemporal optimization by a government seeking to minimize the distortionary costs of taxation, using Pakistan and Sri Lankan data for 1956-95 and 1964-97, respectively. The empirical results indicate that...

This 2011 Article IV Consultation reports that the vulnerability of Belgium’s sovereign debt to market pressures makes credible medium-term fiscal consolidation a priority. The 2012 budget includes sizable consolidation measures, and the government is committed to take additional measures...

France’s economic short-term outlook is positive, and long-term prospects have improved. Fiscal adjustment remains high on the government’s agenda. Tax reforms have improved the economy’s growth potential. Reforms in financial, labor, and product markets are necessary to...

The staff report for the 2004 Article IV Consultation on France highlights economic performance and near-term outlook and policies. On structural issues, a health care reform has established the key instruments to gain control over the system’s budget. Ongoing civil service reform and...

This 2005 Article IV Consultation highlights that economic activity in Germany is slowly picking up, and there is scope for some further firming of growth in the course of 2006. The recovery, however, remains unbalanced, and strong exports have yet to feed through into higher household spending....

This 2004 Article IV Consultation highlights that during the recent upswing, growth in Belgium has been comparatively robust, propelled by strong household spending and supported by the global recovery as well as macroeconomic policies. Tax cuts and wage increases have sustained disposable...

This paper analyzes developments in non-oil tax policy, administration, and revenues in Azerbaijan, and suggests measures for further improvement. The main finding is that Azerbaijan's non-oil tax revenues increased significantly as a share of non-oil GDP in the last five years, but remain below...

This paper develops a public education scheme that takes uncertainty aspects of private educational investments explicitly into account. In the author’s framework, the social merits of public education schemes are related to the lack of markets in which students can insure against educational...