We build quadratic labor adjustment costs into an otherwise standard New-Keynesian model of the business cycle and show that this is sufficient to increase both, output and inflation persistence.

A mandatory open-network-provision (ONP) by dominant firms is the appropriate government regulation in the presence of network externalities. For basic telephone services and online services, a permanent ONP regulation seems indispensable, whereas telecommunication networks only require...

National borders substantially matter in passenger air traffic. Empirical estimates based upon a new data set on domestic and international departures from German airports indicate that the German border reduces air traffic activity by a factor of four to five. This result adds a further piece...

The economic analysis of technology policy suggests non-distortive public support of private innovative activities with a stress upon basic rather than applied research. Actual technology policy in Germany is marked by a high degree of sectoral selectivity which results from the dominance of...

This paper examines the interactions between employment and training policies. Their effectiveness in stimulating income may be interdependent for various important reasons. For example, the more employment policies stimulate the employment rate, the greater the length of time over which workers...

We explore the far-reaching implications of replacing current unemployment benefit (UB) systems by an unemployment accounts (UA) system. Under the UA system, employed people are required to make ongoing contributions to their UAs and the balances in these accounts are available to them during...

We analyze the interaction among important institutional variables in the labor market (firing costs, minimum wages and unemployment benefits) in determining firm-provided training. We find that the institutional interactions - specifically, their degree of complementarity and substitutability -...