The claim that in policy games nonneutrality and a stagflation bias emerge in equilibrium if the unions care about inflation, per se, is discussed. This assumption is shown to be not necessary to obtain a stagflation bias; the same applies to nonneutrality if a government acts in the economy....

A profit-making financial system is introduced into the Pasinetti model of growth and distribution with the aim of showing that Pasinetti's formulation implicitly incorporated a well-defined theory of finance. In a golden age, the financial sector must set the rates of interest below the rate of...

This paper critically re-examines the restructuring of public services. Four main decision-making phases are identified: the public oversight to be guaranteed to socially sensitive economic activities; the ways of financing them; the economic organisation of the industry; and the production...

We study the e¤ects of underground activities on labour market dynamics in a RBC model with search frictions in the labor market, bargained wage and quadratic hiring costs. Underground activities, which allow agents to (partially) evade taxes, are modelled through a moonlighting production...

We introduce some elements of Prospect Theory into a general equilibrium model with monopolistic competition in the good market and real wage rigidities due to (right to manage or efficient) wage bargaining, or to efficiency wages. We show that, under these types of labor market frictions, an...