Using a simple extension of Mortensen and Pissarides (1994), we show that substituting layoff taxes for payroll taxes reduces unemployment. Indeed, layoff taxes lead the firms to internalize the effect of dismissals on unemployment costs. So countries which have costly employment protection...

In the literature of balance of payments crises, the collapse appears as the consequence of a "reserve hemorrhage". Nothing that the true origin of the "crisis" is not a reserve "problem" but Government insolvency, the purpose of this article is to relate the viability of a fixed exchange rate...