The standard literature on working time has modelled the decisions of firms in a deterministic framework in which firms can choose between employment and overtime (given mandated standard hours). Contrary to this approach, we consider the impact of uncertainty and real options on the decision of...

UK regional data on GDP and the GDP deflator are analysed to extract information on underlying demand and supply shocks as well as aggregate demand and supply shocks. Identification is achieved using long run restrictions, based on a theoretical model. The main results are that the supply shocks...