Using an intertemporal model of saving and capital accumulation with two types of agents (workers and capitalists) we demonstrate that it is impossible for any binding minimum wage to increase the after-tax incomes of workers if the production function is Cobb-Douglas with constant returns to...

Two macro models one for a closed economy and the other for a small open economy are used to examine the scope for income redistribution and employment creation. In particular, the introduction of both a guaranteed annual income (basic income) and an employment subsidy are examined, and these...

This paper analyzes long run outcomes resulting from adopting a binding minimum wage in a neoclassical model with perfectly competitive labour markets and capital accumulation. The model distinguishes between workers of heterogeneous ability and capitalists who do all the saving, and it entails...

We explain the public's support for the minimum wage (MW) institution despite economists' warnings that the MW is a "blunt instrument" for redistribution. To do so we build a model in which workers are heterogeneous in ability, and the government engages in redistribution through the public...

Using an intertemporal model of saving and capital accumulation we demonstrate that it is impossible for any binding minimum wage to increase the after-tax incomes of workers if the production function is Cobb-Douglas with constant returns to scale, or if there are no differences in ability...

To many economists the public's support for the minimum wage (MW) institution is puzzling, since the MW is considered a "blunt instrument" for redistribution. To delve deeper in this issue we build models in which workers are heterogeneous in ability. In the first model, the government does not...

In this paper we argue that strong political economy forces explain the rush of the EU to expand eastwards. We use a model of vertical product differentiation in order to claim that technologically- advanced EU firms (residing in high-income member countries) prefer a mutual market-opening with...

We construct a two sector general equilibrium model in which one sector produces a homogeneous good and the other sector produces a vertically differentiated good. We demonstrate that uniform (across sectors) and (Hicks) neutral technological change can cause an increase in the skill premium.

This paper evaluates two approaches to work-sharing by examining both within the same macro model. The standard approach involves imposing a quantity constraint on labour market participants (a maximum number of standard hours for each worker). This approach is compared to a revenue-neutral...

In this paper we use a model of vertical product differentiation to cast doubt on the general validity of the import demand function as specified in macroeconomic models. The empirical importance of our theoretical concerns is then examined with the aid of two hypotheses. According to the first...