How are inflation and unemployment related in the long run? Are they negatively correlated, as in the so-called naive Phillips curve theories or uncorrelated, 'as in the neo-liberals' view or are they positively correlated as Friedman suggested in his Nobel lecture? In this paper inflation is...

This paper analyses the effects of so-called "green" tax reforms on a small, open economy producing an imperfect substitute for foreign goods, using an intertemporal general equilibrium model. The labour market is characterised by union wage setting, and a fixed exchange rate implies wage...

This paper develops a model with multiple steady states (low tax and unemployment rate versus high tax and unemployment rate) in which equilibrium selection is not conditioned on a sunspot variable. Instead, large enough shocks initiate unavoidable transitions from one regime to the other. The...

An economy's production set is the collection of all net output vectors that the economy is capable of producing with a given technology and fixed quantities of primary factors of production. The boundary of this set is called the production possibility frontier or PPF. We show that, if the...

We investigate experimentally the economic effects of wage taxation to finance unemployment benefits for a closed economy and an international economy. The main findings are the following. (i) There is clear evidence of a vicious circle in the dynamic interaction between the wage tax and...

Most macroeconomic models employ sticky wages to generate unemployment. Herbert Simon however thought Schumpeterian micro processes can generate unemployment without wage stickiness. This paper develops Simon's thesis. Unemployment emerges due to the heightening of uncertainty and the consequent...

This paper develops a model with multiple steady states (low tax and unemployment rate versus high tax and unemployment rate) in which equilibrium selection is not conditioned on a sunspot. Instead, large enough shocks initiate unavoidable transitions from one regime to the other. The...

COVID-19 has posed severe challenges not only to researchers in the field of medicines and natural sciences but also to policymakers. Almost all nations of the world lockdown have been chosen as an immediate response to this pandemic crisis. Given that the labour market in India continues to be...

Inequality in South Africa is the enduring legacy of racial discrimination. We use a dynamic perspective to show the linkages between persistent effects of discrimination in the labour market and the efficacy of redistributive fiscal policy in reducing inequality. We present a machine-learning...