If productivity increases more slowly for services than for manufactured goods then services suffer from Baumol's cost disease and tend to become relatively more costly over time. Since the welfare state in all countries is an important supplier of tax financed services, this translates into a...

The consequences of cylical contingencies in unemployment insurance systems are considered in a search-matching model allowing for shifts between goodʺ and badʺ states of nature. An argument for state contingencies is that insurance arguments are stronger and incentive effects weaker in "bad"...

This paper takes a first step in analysing how a monetary union performs in the presence of labour market asymmetries. Differences in wage flexibility, market power and country sizes are allowed for in a setting with both country-specific and aggregate shocks. The implications of asymmetries for...

How should pensions be taxed? In many cases pension savings are usually taxed more leniently than other forms of savings. What is the rationale for this? And are those concerns best targeted via taxation or mandatory pension savings? These issues are discussed with outset in the experience of...

How does international integration affect the welfare state? Does it call for a leaner or an expanded welfare state? International integration may affect the distortions caused by welfare state activities but also the risks motivating social insurance mechanisms. This paper addresses these...