The national-income account identity and the life-cycle theory of consumption together imply that the current account should be a function of the age structure. A country with a high proportion of young and retired should have current account deficits. Using a panel of 84 countries, we find...

This paper extends the literature on the Dutch disease by showing how natural resources can reduce secondary-sector employment and investment through channels involving labor-market externalities and exchange-rate volatility. We then look at data from Iceland - which is one of few OECD countries...

Medium- to long-term changes in unemployment appear to be closely correlated with medium- to long-term changes in private investment. This becomes a puzzle once we abandon the Keynesian framework as an explanation for medium-term movements in unemployment and replace it with the natural-rate...

This paper introduces the age structure of the population into the analysis of medium term unemployment swings. We incorporate age-related features into the Shapiro-Stiglitz shirking model and find that the observed age pattern of unemployment can be explained in terms of the model. Moreover, we...

This paper looks at the importance of scale economies - defined in terms of the benefits from innovation - from both a theoretical and an empirical perspective. We argue that one can only gauge the degree of scale economies at the industry level by taking account of the degree of specialization...

This paper presents a dynamic model that gives an account of some of the forms that the Dutch Disease can take through both product and labour markets. These involve an effect of primary sector output - through real wages and the level and volatility of real-exchange rates - on secondary sector...

In this paper we look at the costs and benefits for Iceland from joining the EMU from a labour-market perspective. We conclude that none of Mundell's three criteria for an optimal currency area are at present fulfilled for Iceland and the initial Euro zone. Shocks to the Icelandic economy are...