We extend the finance-constrained economy proposed by Woodford (1986) to incorporate imperfectly insured unemployment, by introducing unions and unemployment benefits financed by labour taxation. We show that this simple extension of the Woodford model changes drastically its stability...

We investigate whether or not the imposition of a common EC energy-tax will penalize more the poorer Southern European economies and if this will harm convergence at the EC level. We start by surveying briefly the existing studies and empirical evidence. Then we exploit the results obtained when...