The paper examines the determinants of the division of labor within firms. It provides an explanation of the pervasive observed changes in work organization away from the traditional functional departments and toward multi-tasking and job rotation. Whereas the existing literature on the division...

This paper presents a new approach to the theory of the firm by identifying factor complementarities as central to the determination of the firm's boundaries. The factor complementarities may take a variety of forms: technological and informational complementarities, as well as economies of...

The paper shows how prolonged price inertia can arise in a macroeconomic system in which there are temporary price rigidities as well as production lags in the use of intermediate goods. In this context, changes in production demand - generated, say, by changes in the money supply - have...

The paper examines the implications of an important aspect of the ongoing reorganization of work - the move from occupational specialization toward multi-tasking - for centralized wage bargaining. The analysis shows how, on account of this reorganization, centralized bargaining becomes...

The paper analyses the interaction between economic incentives and work norms in the context of social insurance. If the work norm is endogenous in the sense that it is weaker when the population share of beneficiaries is higher, then voters will choose less generous benefits than otherwise. We...

This paper discusses how ICT and emerging electronic commerce in consumer products influence the relative efficiency in production of households and firms, resulting in changes in the division of tasks between these two types of agents. Increased information and competence of households, in...

This paper addresses various attempts by so-called new Keynesians, writing mainly in the 1980s and 1990s, to strengthen the analytical basis, in particular the microeconomic foundations, of these assertions. What, exactly, have then the new Keynesians accomplished, and how should their...

Can income equality be combined with high economic efficiency and rapid economic growth? Fortunately, we need not to answer such a general question. Indeed, the question is poorly phrased. The relationship between income and wealth distribution, on one hand, and efficiency/growth, on the other,...

This paper applies a systems-oriented, “holistic” approach to China’s radical economic reforms during the last quarter of a century. It characterizes China’s economic reforms in terms of a multidimensional classification of economic systems. When looking at the economic consequences of...

The publication of János Kornai’s memoirs, By Force of Thought, provides an excellent opportunity to remind ourselves of Kornai’s great contributions to economic research. This paper discusses both his basic research strategy and some of his main research results. Kornai has usually dealt...