This paper explores a variety of government policies that can stimulate employment when unemployment is generated through conflicts of interest between insiders and outsiders. It also provides guidelines for identifying polices that may be ineffective. The authors show how supply-side policies...

It is assumed in this paper that habits and social norms constrain the influence of economic disincentives on individual behavior but that these constraints themselves may subsequently be influenced by the very same disincentives. It is also assumed that an individual is more likely to obey such...

A general equilibrium model with household production and a government service production sector is developed. The authors study the consequences of increased tax-financed government spending for employment, unemployment, and the trade balance. It is also shown that increased transfers to...

In the traditional Keynesian and classical models, the transmission of product demand changes to the labor market generally involves wage-price sluggishness or countercyclical real wage movements. In practice, however, real wages are often acyclical or procyclical, and wages and prices are...