This paper explores the optimal design of subsidies for hiring unemployed workers ("employment vouchers" for short) in the context of a simple macroeconomic model of the labor market. Focusing on the short-term and long-term effects of the vouchers on employment and unemplkoyment, the analysis...

This paper is an attempt to account for the empirical results of Krueger and Summers (1988) which suggest significant inter-industry wage differentials. We derive a dynamic efficiency wage model where firms use their wage policy to reduce turnover costs. Industry wages are shown to be a positive...

This paper considers extension of the standard cobweb model in a market with local externalities. In contrast with the standard cobweb model, firms must forecast both prices and local quantities; Fourier analysis is shown to lead to new constructive stability and existence conditions for...