We propose a monetary model in which the unemployed satisfy the official US definition of unemployment: they are people without jobs who are (i) currently making concrete efforts to find work and (ii) willing and able to work. In addition, our model has the property that people searching for...

Of the world’s 6.7 billion people (as of 2008), 1.3 billion lived on less than $1.25 Purchasing Power Parity dollars per person per day and another 1.7 billion lived on between $1.25 and $2.50 PPP dollars (Chen and Ravallion, 2012). The scourge of absolute economic misery among billions of the...

We study work effort with its various determinants such as the educational level of the worker, the minimum or start-up salary as well as the initial endowment of the worker. By means of optimization we find that optimal work effort depends directly on the initial income available to the worker,...

This paper investigates the wage-setting behaviour of Irish firms. We place particular emphasis on the use of flexible pay components and examine how these allow firms to deal with shocks requiring a reduction in costs without having to cut base wages. The results presented in this paper are...