Microeconomic flexibility, by facilitating the process of creative-destruction, is at the core of economic growth in modern market economies. The main reason for why this process is not infinitely fast is the presence of adjustment costs, some of them technological, others institutional. Chief...

With the emergence of the Great Recession unemployment insurance (UI) is once again at the heart of the policy debate. In this paper, we review the recent theoretical and empirical evidence on the labor market effects of UI design. We also discuss policy issues related to UI design, including...

Although the negative economic effects of temporary employment are widely discussed, cross-country research on firms' demand for temporary employment is rare. National studies indicate that workload fluctuations are one major motive for firms to employ temporary workers. By studying a novel data...

The present study aims to contribute to the debate concerning the effects on economic performance and the structure of the labor market of regulations that combine high Employment Protection Legislations (EPL) with consent for the use of fixed-term contracts (FTC). Using a Rajan and Zingales...

Inflation and unemployment are central issues in macroeconomics. While progress has been made on these issues recently using models that explicitly incorporate search-type frictions, existing models analyze either unemployment or inflation in isolation. We develop a framework to analyze...

This paper tests two hypotheses from the theory of elimination tournaments: (i) that uneven tournaments, where the contestants are ex ante heterogeneous, entail lower effort exertion; this is a prediction from agency theory that has not been tested empirically before; and (ii) whether incentives...

The process leading to the setting of the minimum wage so far has been fairly overlooked by economists. This paper suggests that this is a serious limitation as the setting regime contributes to explain cross-country variation in the fine-tuning of the minimum wage, hence in the way in which the...

The monetary transmission mechanism plays an important role in studying the effects of monetary policy on the real side of the economy. At least since Chari et al. (2000) it is generally accepted that new keynesian models of the business cycle display a persistence problem. In this paper, we...

Discrimination, September 11th, Exit from unemployment. This paper examines whether the attacks on the World Trade Center and the Pentagon on September 11th, 2001 have influenced the job prospects of Arabs in the German labor market. Using a large, representative database of the German working...