I propose a two-sector endogenous growth model with heterogeneous sectoral productivity and nonlinear hiring costs to analyse the link between sectoral resource allocation, low productivity growth and stagnant real wages. My results suggest that an upward shift in employment, triggered for...

This paper proposes a new approach to evaluate the macroeconomic effects of the Hartz IV reform in Germany, which reduced the generosity of long-term unemployment benefits. We use a model with different unemployment durations, where the reform initiates both a partial effect and an equilibrium...

We analyze within a spatial endogenous growth setting the impact of public policy coordination on regional inequality. Governments in each of the two symmetric regions provide a local public input that becomes globally effective due to integration. Micro-foundation of governmental behavior is...

A decision problem is relatively complex and broadly involves two distinct moments, i) information gathering and ii) use of available information and decision-making. In the first case one can discuss the potential of rigorous methods (statistical analysis and modelling) commonly used to enable...