model; incorporating labor market frictions in the form of hiring and firing costs. We show that such a model is able to …

countervailing fall in reservation wages, leaving the present value of wage costs unchanged. Our analysis contradicts this …

a dynamic model of labour demand in which the effect of firing costs on labour demand depends on the macroeconomic … rise in firing costs affects mainly (and adversely) the hiring decision and not the layoff decision. This makes firing … costs harmful to employment when it may appear most appropriate. In contrast, firing costs can raise employment during …

This Paper presents a new approach to the theory of the firm by identifying factor complementarities as central to the … transactions costs. In so doing, we must abandon the standard dichotomy between the determinants of plant size and firm size. The …