This Paper presents a methodology to identify net demand shocks as well as wage rigidities in heterogeneous labour markets on the basis of nonparametric regression. We show how this approach can be used to make suggestions for immigration policy in economies with labour market rigidities. In an...

This Paper investigates whether and in what sense the west German wage structure has been ‘rigid’ in the 1990s. To test the hypothesis that a rigid wage structure has been responsible for rising low-skilled unemployment, I propose a methodology that makes less restrictive identifying...

We analyse Polish active labour market policy (ALMP) training programmes from a macroeconomic (regional) point of view. The effects of training programmes on the outflows from unemployment and the effects of all ALMP programmes on the outflows from employment (to identify displacement effects)...

We estimate the employment effects of training, intervention works (subsidized employment) and public works programmes in Poland. The analysis is based on retrospective monthly calendar information on the labour force state and Active Labour Market Programme (ALMP) participation between January...

Switzerland, traditionally a ‘zero unemployment’ economy, has seen an unprecedented rise in joblessness in the 1990s although unemployment fell again to a rather low level after 1997. This Paper tests whether Switzerland experienced a negative relative net demand shock against the low...

This paper gives a short overview of Monte Carlo studies on the usefulness of Heckman's (1976, 1979) two-step estimator for estimating selection models. Such models occur frequently in empirical work, especially in microeconometrics when estimating wage equations or consumer expenditures. It is...

We propose a new theory of systemic risk based on Knightian uncertainty (or "ambiguity"). We show that, due to uncertainty aversion, beliefs on future asset returns are endogenous, and bad news on one asset class induces investors to be more pessimistic about other asset classes as well. This...

Since the 2008 global financial crisis, and after decades of relative neglect, the importance of the financial system and its episodic crises as drivers of macroeconomic outcomes has attracted fresh scrutiny from academics, policy makers, and practitioners. Theoretical advances are following a...

We analyze political selection in a closed list proportional system where parties have strong gate-keeping power, which they use as an instrument to pursue votes. Parties face a trade-off between selecting loyal candidates or experts, who are highly valued by the voters and thus increase the...