Abstract The paper shows that a more flexible labor market is unequivocally necessary for a lasting and substantial reduction of unemployment. It furthermore points out that a more flexible labor market is even beneficial from a long-run distributional point of view. Hence, the key to...

Abstract Labor market performance has differed considerably between OECD countries over the last two decades. The focus of the literature so far has been to ask whether these differences can be explained by varying degrees of labor market rigidities and generosity of welfare states. This paper...

Abstract This paper deals with the system of fiscal federalism (Finanzausgleich) in Germany and its effects on macroeconomic growth. The maze of both transfers from federal government to the states (vertikaler Finanzausgleich) and interregional transfers between the states (horizontaler...