This article argues in favor of drawing a distinction between the concepts of labor rationing and unemployment. Labor rationing refers to the occurrence of excess supply in a given labor market and unemployment to the job searching activity. The former, it will be argued, is a necessary yet...

Is the Great Depression amenable to real business cycle theory ? In the 1970s and 1980s Lucas and Prescott took an abstentionist stance. They admitted that, because of its exceptional character, an explanation of the Great Depression was beyond the grasp of the equilibrium approach to the...

This paper characterizes the optimal redistributive taxation when individuals are heterogeneous in two exogenous dimensions : Their skills and their values of non-market activities. Search-matching frictions on the labor markets create unemployment. Wages, labor demand and participation are...