Economic theory defines and constrains admissible functional form and functional structure throughout the economy. Constraints on behavioral functions of individual economic agents and on the recursive nesting of those behavioral functions often are derived directly from economic theory....

Europe's notoriously high level of unemployment is one of the big puzzles of empirical macroeconomics. In recent years, the unemployment rate has fallen in The Netherlands, but the overall level in OECD Europe remains high. An investigation into why Dutch economic policy has been relatively...