There is increasing evidence that the interaction between shocks and labour market institutions is crucial to understanding the dynamics of employment. In this paper, we show that the inclusion of labour adjustment costs in a trade model affects the impact of exchange rate movements on...

The paper demonstrates that policy makers may have a precautionary motive to undertake more labor-market reform--and hence attain lower equilibrium unemployment--inside a monetary union than outside. The reason is a desire to reduce the utility cost of variations in employment when asymmetric...

I examine the effect of labour market policies and institutions on the transmission of macroeconomic shocks to the labour market, using both aggregate and industry-level annual data for 23 OECD countries, 23 business-sector industries and up to 29 years. I find that high and progressive labour...