The analysis provides a new explanation for two widespread problems concerning European unemployment policy: the disappointingly small effect of many past reform measures on unemployment, and the political difficulties in implementing more extensive reform programs. We argue that the heart of...

Professor Dennis J. Snower, President of the Kiel Institute for the World Economy since 2004, addresses the riddle of persistent unemployment in free market economies, outlining first a set of popular explanations for this phenomenon (and quickly showing why they are inadequate), then the main...