The paper presents a new empirical regularity between the volatility of productivity growth and long-run unemployment, for a given level of long-run productivity growth. A theoretical framework based on asymmetric real wage rigidities is shown to have the potential to rationalize this finding....

According to Brazilian law, federal transfers to municipal governments change discontinuously at numerous predetermined population thresholds. We employ a 'fuzzy' regression discontinuity design to identify the causal effect of federal transfers on local economic activity. The analysis points to...