The literature on unemployment has mostly focused on labor market issues while the impact of capital formation is largely neglected. Job-creation is often thought to be a matter of encouraging more employment on a given capital stock. In contrast, this paper explicitly deals with the long-run...

[Einleitung:] Arbeitslosigkeit. Einer Heimsuchung gleich beschäftigt dieses Problem nunmehr schon seit etlichen Jahren wie kein anderes die Menschen in Deutschland. Zukunftsangst macht sich breit, weil die Bürger befürchten, daß eine immer weiter steigende Massenarbeitslosigkeit das...

While policymakers in Europe were busy implementing EMU during the past decade, persistently high unemployment, which should have been the main policy issue from a normative point of view, was essentially left untackled in most continental European countries. This poses the urgent question which...

This paper deals with the much discussed question how to design labor market policy in a global economy. The starting point of the paper is the fact that national unemployment rates differ greatly, which alludes to country-specific institutional factors being the most plausible culprit for...

The paper shows that a more flexible labor market is unequivocally necessary for a lasting and substantial reduction of unemployment. It furthermore points out that a more flexible labor market is even beneficial from a long-run distributional point of view. Hence, the key to liberalizing the...

This paper presents a positive model which shows that institutional setups on capital and labor markets might be intertwined by politicoeconomic forces. Two politicoeconomic equilibria arise from our model, one with little protection of insiders on capital and labor markets, and another one with...