It is well known that rational bubbles can be sustained in balanced growth path of a deterministic economy when the return to capital <I>r</I> is equal to the growth rate <I>g</I>. When there is a lack of stores of value, bubbles can implement an efficient allocation. This paper considers a world where <I>r</I>...</i></i></i>

The paper applies Ricardo's principle of comparative advantage to analyze the substitutability between types of labor. The problem of having to classify labor in a small number of types in e.g. standard CES models are avoided by applying a continuum of worker and job types, where better skilled...

While the employment effects of minimum wages are usually reported to be small (suggesting low substitutability between skill types), direct estimates suggest a much larger degree of substitutability. This paper argues that this paradox is largely due to a bias induced by the aggregation of...

In a corporatist country, of which the Netherlands is an example, wages should not be distinguished by union membership status, but by the bargaining regime. Four bargaining regimes can be distinguished: (i) company level bargaining, (ii) industry level bargaining, (iii) mandatory extension of...

In this paper we derive a structural measure for labor market density based on the Ellison and Glasear (1997) Index for industry concentration. This labor market density measure serves as a proxy for the number of workers that can reach a certain work area within a reasonal amount of traveling...

This paper describes a search model with a continuum of worker and job types, free entry and transferable utility. We apply a second-order Taylor expansion to characterize the equilibrium, derive the cost of search and show that it is decreasing in the substitutability of worker types. This cost...

Though a lot of work has been done on the distribution of job tenures, we are still uncertain about its main determinants.In this paper, we stress random shocks to match productivity after the start of an employment relation.The specificity of investment makes hiring and separation decisions...