This paper examines positive and normative implications of efficiency-wage induced unemployment within a model of … and the rate of unemployment. The sign of this correlation is shown to be given by the intersectoral wage differential …. Despite the existence of unemployment, decisive positive properties of the full-employment model are preserved. However …

unemployment when wages are inflexible. As protection against this possibility, it is proposed to use the proceeds of the green tax … to subsidize employment. In the best case, this protects the environment and reduces unemployment (double dividend …). However, even if the main cause of unemployment is a minimum wage, an additional efficiency-wage component (which explains …

unemployment across a sample of OECD countries. Using an incomplete markets variant of the fair wage real business cycle model …, increases in the gross replacement rate of public unemployment insurance are shown to increase the volatility of employment, and … which unemployment is endogenised in the model. …