We use three general equilibrium frameworks with jobs and unemployed workers to study the effects of government … mandated unemployment insurance (UI) and employment protection (EP). To illuminate the forces in these models, we study how UI … representative family model with employment lotteries has no labour market frictions and complete markets. The adverse welfare state …

workers, hazard rates of gaining employment in Europe fall off sharply with the duration of unemployment, and why displaced …Similar durations but lower flows into unemployment gave Europe lower unemployment rates than the United States until … the 1970's. But since 1980, higher durations have kept unemployment rates in Europe persistently higher than in the U.S. A …

This paper investigates the implications of budgetary policies for consumption and economic growth. We present a model … a rise in government debt, financed by lump-sum taxes, increases the share of private consumption to national income and … reduces the long-run growth rate. We also show that a rise in government consumption financed by lump-sum taxes reduces both …

marginal products can rationalize these disparate outcomes when we replace commonly used measures of total labour supplies by … private sector employment. Our analysis suggests that the dramatic decline of the skill premium in Sweden is the result of an … of drawing low-skilled workers into local government jobs that service the welfare state. …

natural rate of unemployment. In addition, because of differential inflation across countries, real exchange rates become …

We extend the `rational-partisan' model of inflation to allow for the effects of unemployment persistence on the … to the failure of political parties to precommit to price stability, in the light of unemployment persistence. Elections … are associated with higher inflation, with the exception of the Thatcher period. There is no evidence that the Labour …

recent differential unemployment persistence in our sample of countries: first, sluggishness in labour demand, and second …In this paper we present an investigation of unemployment persistence in Japan, the United States and fourteen European … economies. We concentrate on the sources of slow adjustment in the labour market, such as sluggishness in labour demand and …

We extend the `rational partisan model' of inflation and unemployment by introducing inflation and unemployment … stability. The greater aversion of `socialists' to unemployment results in an inflation rate which is higher by five percentage … points than under the more anti-inflationary `conservatives'. Unemployment seems to be independent of the identity of the …

To generate big responses of unemployment to productivity changes, researchers have reconfigured matching models in … introducing costly acquisition of credit, or by positing government mandated unemployment compensation and layoff costs. All of … these redesigned matching models increase responses of unemployment to movements in productivity by diminishing the …

return to work due to those layoff costs and the associated inefficient allocation of labour. Additional adverse employment …General equilibrium analysis of layoff costs have had mixed messages on the implications for employment. This Paper … brings out the economic forces at work and explains the disparate results. Specifically, we show that positive employment …