Will the current employment crisis produce lost generations with permanently lower labour market attachment? Taking an explicit cohort perspective and based on Danish data we do not find strong persistence in employment rates at the cohort level. Younger workers tend to be more exposed to...

Rules and discretion in public sector decision making are compared in a macroeconomic setting where there is a potential role for an active stabilization policy when the policymaker has private information about nominal shocks. The credibility of announcements about the state of nature is shown...

The role of asymmetric information and the incentive to acquire information is considered for a monopolistically competitive economy. To focus on nominal rigidities, the money stock is the only state variable, and it is shown how informational problems can cause nominal price rigidities. Under...

The coordination of production and consumption decisions is analysed in a static model where the interdependence between production, income and demand is explicitly modelled. With imperfect competition and non-convex production technologies it is shown that there exists a zero pure profit...

How will international integration affect welfare policies? This paper considers the possibilities of financing public sector activities (public consumption and social security expenses) by general (wage) taxation in an economy which becomes more integrated in international product markets. Even...

International integration strengthening intra-industrial trade may have important implications for employment, wages and inequality. The reason is that product market integration enhances export possibilities through easier access to foreign markets, but also import threats arising from foreign...

How does a monetary union work when labour markets are heterogeneous? Since shocks are transmitted via both trade links and the common monetary policy and propagated via labour market responses, it follows that labour market institutions may have not only national but also union-wide...