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...

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...

Early, the convergence theory was suggestively expressed in the Solow model. This can be shown in line with the fact that while economic development is advancing (expressed by the income per capita growth), on long run there is a general convergence process among countries. Generally, empirical...

Coming from standard economic growth theory and empirical evidences, we concentrated on the convergence process as a result of structural changes in economy. We investigate the differences among countries in EU in terms of the share in total economy of main sectors. Then, based on the spatial...

Does trade improve institutions and contribute to long run growth? I develop a theory of trade, in which trade liberalization provides incentive to change institutions in two ways. On the one hand, trade leads to specialization according to comparative advantage, expanding the industries that do...

The foreign direct investments (FDI) spillovers are probably the most extensively analyzed channel of knowledge spillovers (the most important channel for the transfer of knowledge and technology to firms of the host country). Scholars as well as policy makers increasingly treat FDI spillovers...

Most of the aggregate level analyses on the relationship between objective and subjective measures for well-being have limited themselves to measures of national GDP and mean life satisfaction. We develop this line of research by embedding the analysis into the context of 289 NUTS regions in...

The speed of income convergence in Europe remains one of the hot topics in regional economics. Recently Bayesian Model Averaging (BMA) applied to spatial autoregressive models seems to have gained more popularity. BMA averages over some predetermined number of so called top models, ranked by the...

The paper focuses on quantitative assessment of the innovation's role in explaining regional disparities and convergence in Europe. The empirical part of the study bases on the regional GDP pc and innovation indicators on the EU-27 NUTS2 level regions. Based on the selected set of initial...