The literature on unemployment has mostly focused on labor market issues while the impact of capital formation is largely neglected. Job-creation is often thought to be a matter of encouraging more employment on a given capital stock. In contrast, this paper explicitly deals with the long-run...

This paper studies a model of the distribution of income under bounded needs. Utility derived from any given good reaches a bliss point at a finite consumption level of that good. On the other hand, introducing new varieties always increases utility. It is assumed that each variety is owned by a...

Die Auswirkungen zunehmender Digitalisierung auf die Beschäftigung werden kontrovers diskutiert. Der Autor zeigt, dass eine faire Verteilung des zusätzlichen Produktivitätsgewinns zwischen Kapital und Arbeit günstig für die Beschäftigung ist. Voraussetzung hierfür sind eine ausgewogene...

Labor income shares have been falling in many advanced and emerging economies within the last few decades, partly as a result of a combination of impacts from technology and increased global integration. This in turn is associated with the relatively slow growth of wages, especially for...

Over the business cycle, labor's share of output is negatively but weakly correlated with output, and it lags output by about four quarters. Profit's share is strongly procyclical. It neither leads nor lags output, and its volatility is about four times that of output. Despite the importance of...

We incorporate a wage bargaining structure in a dynamic general equilibrium model and show how this feature changes short and long-run properties of equilibria compared with a perfectly competitive setting. We discuss how employment, capital, and income shares respond to wage setting shocks and...

The 'big trade-off', described by Arthur Okun some thirty years ago, is back again. Equality or efficiency, or to put it differently again: modern highly developed economies and societies have to choose between the Scylla of income inequality or the Charybdis of unemployment. Furthermore, it...

The paper shows that a more flexible labor market is unequivocally necessary for a lasting and substantial reduction of unemployment. It furthermore points out that a more flexible labor market is even beneficial from a long-run distributional point of view. Hence, the key to liberalizing the...

We develop a theoretical model with labor market frictions, incomplete financial markets and with households which have two members. Households face unemployment risks but their members adjust their labor supplies to insure against unemployment. We use the model to explain the cyclical...

The openness to international trade and capital movements of industrialized countries has increased substantially during the recent decades. At the same time, most of these countries experienced a rise in income dispersion. Against this background, the paper analyzes empirically whether the...