We examine the relationship between the directly observable indicator of new technology, ICT investment ratio, and skill upgrading by analysing changes in employment and wage structure of 25 Korean industrial sectors over the 1993-99 period. The results show that there has been little...

The global financial crisis has now spread across multiple countries and sectors, affecting both financial and real spheres in the advanced as well as the developing economies. This has been caused by policies based on rational expectation models that advocate deregulated finance, with...

This paper presents four policy options to make Social Security sustainable under the coming demographic shift: 1) increase payroll taxes by 6 percentage points, 2) reduce the replacement rates of the benefit formula by one-third, 3) raise the normal retirement age from sixty-six to...

Cooper and Willis (2003) is the latest in a sequence of criticisms of our methodology for estimating aggregate nonlinearities when microeconomic adjustment is lumpy. Their case is based on 'reproducing' our main findings using artificial data generated by a model where microeconomic agents face...

We characterize the degree of microeconomic inflexibility in several Latin American economies and find that Brazil, Chile and Colombia are more flexible than Mexico and Venezuela. The difference in flexibility among these economies is mainly explained by the behavior of large establishments,...

The present paper provides an overview of literature on the shift to services. It follows the three dimensions of structural change - final demand, the inter-industry division of labor and inter-industry productivity differences. It first looks at the ?classics?, however (Fisher (1935), Clark...

This paper bolsters Prescott's (2004) claim that high taxes are responsible for lacklustre labor market performance in continental European countries. We develop a lifecycle model with endogenous skill formation, endogenous labor supply, and endogenous retirement. Labor taxation distorts not...

In almost all Western economies the median age of the workforce is increasing due to demographic factors. Given the empirical fact that workers of different ages are not perfect substitutes in production, this paper explores how change in the age pattern affects wages and (un)employment. We...

Can a model with limited labor market insurance explain standard macro- and labor market data jointly? We seek to construct a monetary model in which: i) the unemployed are worse off than the employed, i.e. unemployment is involuntary and ii) the labor force participation rate varies with the...

The paper studies the determinants of income distribution and growth in an overlapping generations economy withheterogenous households. Our framework has the following main features:heterogeneity of consumers with respect to wealth and parental human capital;intergenerational transfers,...