The rational expectations hypothesis (REH) is based on two assumptions. The first is that, economic agents learn through experience how to avoid systematic errors. The second is that these errors are identified with reference to a model. Imperfect information may lead economic agents to...

This paper investigates whether the ‘big tradeoff’ between efficiency and inequality exists, and analyzes empirically the relationship between inequality, redistribution, and employment/unemployment. The analysis is based on a cross-country longitudinal data set (panel data) of 21 OECD...

Expansionary macroeconomic policy is ineffective because, according to the policy ineffectiveness hypothesis (PIH), which is based on the rational expectations hypothesis (REH), it does not affect the real economy. This conclusion is false for several reasons. In their critique on Keynes '...

Institutional Frameworks and Labor Market Performance produces an in-depth analysis of the functioning of various labor market institutions in both the USA and Germany. Particular emphasis is given to the substantial differences between the US and Germany in the ways important areas are...

This paper investigates whether the 'big tradeoff' between efficiency and inequality exists, and analyzes empirically the relationship between inequality, redistribution, and employment/unemployment. The analysis is based on a cross-country longitudinal data set (panel data) of 21 OECD countries...

The rational expectations hypothesis (REH) is based on two assumptions. The first is that, economic agents learn through experience how to avoid systematic errors. The second is that these errors are identified with reference to a model. Imperfect information may lead economic agents to...