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The literature on unemployment dynamics is mainly concerned with the nature and impact of shocks to unemployment. In this paper we use OECD unemployment data to infer the nature of these shocks using factor analysis. We find that two Principal Components can account for a large part of the...
Persistent link: https://www.econbiz.de/10005292817
Is it possible that relying too heavily on natural resources affects saving and investment in a way that hampers economic growth? – and thus, in the long run, the level of output per capita. This paper reviews the literature, explores the data and compares and contrasts the explanatory power...
Persistent link: https://www.econbiz.de/10005481991
We extend the efficiency wage model of Shapiro and Stiglitz to account for the observation that workers’ effort has a tendency to fall when they approach the end of their employment contract. In particular, we find that the efficiency wage increases when the end of term approaches for a given...
Persistent link: https://www.econbiz.de/10011123944
Floating exchange rates allow central banks to respond to aggregate demand fluctuations by changing their interest rates. However, such fluctuations create inertia in the labour market by increasing the cost of hiring and firing workers. A regime of flexible exchange rates can cause rigidities...
Persistent link: https://www.econbiz.de/10011124040
This paper derives the relationship between central bank interest rates and exchange rates under a capital control regime. Higher interest rate may strengthen the currency by reducing consumption and imports and by inducing foreign owners of local currency assets not to sell local currency off...
Persistent link: https://www.econbiz.de/10011124095