the ins and outs of european unemployment in this paper we study the contribution of inflows and outflows to the dynamics of unemployment in three european countries the united kingdom france and spain all countries are interesting in their own right and in the comparison with each other britain s labour markets were strictly regulated up to the mid 1980s but they have been liberalized since then france is still a regulated economy compared with britain with unemployment averaging about 8 spain has had the biggest rise in unemployment in europe reaching 24 in the mid 1990s but policy reforms and fast growth since then brought it down to a level below france s we compare performance in these three countries making use of both administrative and labor force survey data we find that the impact of the 1980s reforms in britain is evident in the contributions of the inflow and outflow rates the inflow rate became a bigger contributor after the mid 1980s although its significance subsided again in the late 1990s and 2000s in france the dynamics of unemployment are driven by the outflow rate virtually entirely which is consistent with a regime with strict employment protection legislation in spain however both rates contribute significantly to the dynamics perhaps as a consequence of the prominence of fixed term contracts since the late 1980s

royalties vs fees how do firms pay for foreign technology abstract the theoretical determinants of technology licensing contracts have been extensively studied but empirical evidence is scarce we assemble a data set of all the foreign technology licensing agreements entered into by manufacturing firms in india between 1989 and 1993 industry firm and contract characteristics are used to explain differences between the forms of payment in licensing contracts our findings support theoretical arguments licensing contracts are more likely to use royalties when sales are relatively high while increased volatility of sales and greater profitability favor fixed fee contracts we also find that firms are more likely to use output based payments to control the sale and diffusion of r d or brand intensive know how to unaffiliated firms

job seeker s allowance jsa benefit sanctions and labour market outcomes in britain 2001 2014 the dominant view among british policy makers is that benefit sanctions for the unemployed who are claiming the job seeker s allowance jsa are effective at increasing flows from unemployment into sustainable employment this paper tests this theory using aggregate cross sectional data for great britain for the period may 2001 to december 2014 descriptive analysis found the relationship between sanctions and labour market outcomes was ambiguous while trends in labour market outcomes were highly correlated with labour market demand multivariate svar time series analysis controlling for labour market demand found evidence that changes in the threat and use of sanctions had a positive impact on flows into work in the short run but not in the long term and had no definitive impact on ilo unemployment at all interrupted time series analyses suggest we cannot reject the null hypothesis that the impact of introduction of a new jsa sanctions regime in october 2012 with higher financial penalties associated with being sanctioned had no impact on flows into work from jsa in britain intensifying the use of sanctions and introducing harsher penalties associated with being sanctioned has been largely ineffective at increasing flows from jsa into sustainable employment given the negative financial and social impacts of sanctions on those affected and the lack of evidence of a sustained positive impact on employment the basis for the new sanctions policy is unclear

the ins and outs of uk unemployment this study shows that in the uk increases in unemployment in a recession are driven by rises in the separation rate a new decomposition of unemployment dynamics is devised that does not require unemployment to be in steady state at all times this is important because low uk transition rates one quarter the size of the us imply substantial deviation of unemployment from steady state near cyclical turning points in periods of moderation the job finding rate is shown to have most influence on uk unemployment dynamics evidence comes from the first study of monthly data derived from individuals labour market spells recorded in the british household panel survey from 1988 to 2008

the licensing of patents under asymmetric information abstract this paper seeks to explain the use of royalty payments rather than fixed fees in the licensing of patents by the presence of asymmetric information the licensee is assumed to know the value of the patent and makes a single offer of a contract to the licensor it is shown that there is a unique equillibrium satisfying cho and kreps intuitive criterion qualitative properties of the equilibrium contract are derived by considering a continuum of types

pretia ex machina prices and process in long term contracts aimong the primary motives for writing contracts identified in both the law and economics literatures is the desire to protect against the hazards inherent to exchange where one or both parties have invested in reliance or relationship specific assets in support of the transaction because such investments have a higher value in their intended than in their next best use parties have an incentive to engage in haggling or other forms of opportunism in hopes of influencing the distribution of the resulting quasi rents contracts promote efficiency by securing the distribution of those rents ex ante thereby avoiding costly repetitive bargaining over the terms of trade and reducing the risk for each party of relying on the performance of the other in reality this description of the role and functioning of contracting is oversimplified as a number of legal and economic scholars have emphasized contracts are not the precise mechanically enforced documents often encountered in economic theory 2 indeed contracts are extremely

common factors in latin america s business cycles this paper constructs new business cycle indices for argentina brazil chile and mexico based on common dynamic factors extracted from a comprehensive set of sectoral output external trade fiscal and financial variables the analysis spans the 135 years since the insertion of these economies into the global economy in the 1870s the constructed indices are used to derive a business cycle chronology for these countries and characterize a set of new stylized facts in particular we show that all four countries have historically displayed a striking combination of high business cycle volatility and persistence relative to benchmark countries and that such volatility has been time varying with important differences across policy regimes we also uncover a sizeable common factor across the four economies which has greatly limited scope for regional risk sharing

when credit bites back using data on 14 advanced countries between 1870 and 2008 we document two key facts of the modern business cycle relative to typical recessions financial crisis recessions are costlier and more credit intensive expansions tend to be followed by deeper recessions in financial crises or otherwise and slower recoveries we use local projection methods to condition on a broad set of macro economic controls to study how past credit accumulation impacts key macro economic variables such as output investment lending interest rates and inflation the facts that we uncover lend support to the idea that financial factors play an important role in the modern business cycle

risk sharing in licensing abstract this paper studies the design of linear license contracts under demand or cost uncertainty the optimal contract consists in general of a mix of a fixed fee and royalties the source of uncertainty has a crucial impact on the type of royalties that must be used in particular under demand uncertainty at most two of the instruments are used the contract generally combines a fixed fee with an ad valorem royalty when cost is uncertain a wider variety of cases can arise the contract may involve a combination of either type of royalties coupled with a fixed fee alternatively it may be optimal to use all three available instruments

the long term effects of job search requirements evidence from the uk jsa reform this paper investigates long term returns from unemployment compensation exploiting variation from the uk jsa reform of 1996 which implied a major increase in job search requirements for eligibility and in the related administrative hurdle search theory predicts that such changes should raise the proportion of non claimant nonemployed with consequences on search effort and labor market attachment and lower the reservation wage of the unemployed with negative effects on post unemployment wages i test these ideas on longitudinal data from social security records llmdb using a difference in differences approach i find that individuals who start an unemployment spell soon after jsa introduction as opposed to six months earlier are 2 5 3 more likely to move from unemployment into incapacity benefits spells and 4 5 less likely to have positive earnings in the following year this latter employment effect only vanishes four years after the initial unemployment shock also annual earnings for the treated individuals are lower than for the non treated these results suggest that while tighter search requirements were successful in moving individuals off unemployment benefits they were not successful in moving them onto long lasting or better jobs with fairly long lasting unintended consequences on a number of labor market outcomes

on the importance of the participation margin for labor market fluctuations abstract conventional analyses of labor market fluctuations ascribe a minor role to labor force participation we show by contrast that flows based analyses imply that the participation margin accounts for around one third of unemployment fluctuations a novel stock flow apparatus establishes these facts delivering three further contributions first the role of the participation margin appears robust to adjustments for spurious transitions induced by reporting error second conventional stocks based analyses are subject to a stock flow fallacy neglecting offsetting forces of worker flows on the participation rate third increases in labor force attachment among the unemployed during recessions are a leading explanation for the role of the participation margin

the cyclicality of labor market flows a multiple shock approach abstract in this paper we aim to establish some stylized facts about the relative contributions of the job finding and separation rates to unemployment dynamics depending on the nature of structural shocks the shocks in our bayesian structural var model are identified using a sign restriction approach and capture shifts in the three conditions determining labor market equilibrium in matching models the beveridge curve and the job creation and job destruction conditions using both us and french data we identify an aggregate shock to match profitability the aggregate profitability shock a shock specific to existing jobs the reallocation shock and a shock to the efficiency of the matching process the matching efficiency shock we find that the relative contributions of the job finding and separation rates are notably different across shocks in both countries but are similar across countries for each type of shock labor market dynamics appear to be transatlantic despite well known institutional differences however it must be emphasized that the reaction of the labor market variables to the matching efficiency shock seems more muted in the us than in france

the cyclicality of separation and job finding rates this paper uses cps gross flow data to analyze the business cycle dynamics of separation and job finding rates and to quantify their contributions to overall unemployment variability cyclical changes in the separation rate are negatively correlated with changes in productivity and move contemporaneously with them while the job finding rate is positively correlated with and tends to lag productivity contemporaneous fluctuations in the separation rate explain between 40 and 50 percent of fluctuations in unemployment depending on how the data are detrended this figure becomes larger when dynamic interactions between the separation and job finding rates are considered

agency theory and franchising some empirical results this article provides an empirical assessment of various agency theoretic explanations for franchising including risk sharing one sided moral hazard and two sided moral hazard the empirical models use proxies for factors such as risk moral hazard and franchisors need for capital to explain both franchisors decisions about the terms of their contracts royalty rates and up front franchise fees and the extent to which they use franchising in this article i exploit several new sources of data on franchising to construct a cross section of 548 franchisors involved in various business activities in the united states in 1986 the data are most consistent with a model based on two sided moral hazard the empirical models are also more successful at explaining the extent to which franchisors choose to franchise stores than at explaining the terms of franchise contracts finally contrary to the predictions of several theoretical models i find that royalty rates and franchise fees are not negatively related

analyzing foreign market entry strategies extending the internalization approach a new fully integrated analysis of the foreign market entry decision is presented encompassing the choice between exporting licensing joint venturing and wholly owned foreign investment the choice between acquisition and greenfield investment is examined and so too are options based on subcontracting and franchising the model extends the insights of internalization theory and draws on concepts from the economics of industrial organization a special feature of the model is the distinction between investment in production facilities and investment in distribution facilities an important practical distinction that has been overlooked in much of the international business literature the strength of competition from indigenous rivals is emphasized as a determinant of entry strategy into both production and distribution

forecasting unemployment across countries the ins and outs abstract this paper evaluates the flow approach to unemployment forecasting proposed by barnichon and nekarda 2012 for a set of oecd countries characterized by very different labor markets we find that the flow approach yields substantial improvements in forecast accuracy over professional forecasts for all countries with especially large improvements at longer horizons one year ahead forecasts for european countries moreover the flow approach has the highest predictive ability during recessions and turning points when unemployment forecasts are most valuable

unemployment through the filter of memory this paper uses data from the annual work experience survey to construct a new unemployment series based on respondents recollection of unemployment over the previous year it is argued that the ratio of this new series to the official series computed from the monthly current population survey provides an index of the salience or painfulness of unemployment over the past two decades this ratio has declined secularly about 30 percent of this decrease is due to shifts in the composition of unemployment toward demographic groups with low ratios of remembered to currently reported unemployment the remainder is due to a secular decline in salience for younger and older people

the role of worker flows in the dynamics and distribution of uk unemployment unemployment varies substantially over time and across sub groups of the labour market worker flows among labour market states act as key determinants of this variation we examine how the structure of unemployment across groups and its cyclical movements across time are shaped by changes in labour market flows using novel estimates of flow transition rates for the uk over the last 35 years we decompose unemployment variation into parts accounted for by changes in rates of job loss job finding and flows via non participation close to two thirds of the volatility of unemployment in the uk over this period can be traced to rises in rates of job loss that accompany recessions the share of this inflow contribution has been broadly the same in each of the past three recessions decreased job finding rates account for around one quarter of unemployment cyclicality and the remaining variation can be attributed to flows via non participation digging deeper into the structure of unemployment by gender age and education the flow approach is shown to provide a richer understanding of the unemployment experiences across population sub groups

unemployment dynamics in britain we examine the inter related dynamics of the unemployment flows and stock our model allows them to be linked through the standard accounting identity but also through behavioural relationships we find that for the uk the bulk of the correlation between duration and the unemployment stock arises from the dependence of duration on unemployment taking careful account of the inter temporal identity outflow shocks have contributed little to the evolution of unemployment since the late 1960s given that the correlation of duration and unemployment arises from the behavioural relationship we show that unemployment dynamics arise mostly from shocks to the inflow unemployment remains one of europe s more pressing economic and social problems as highlighted in the eu s lisbon declaration of 2000 a dynamic approach to unemployment starts from the recognition that unemployment is a stock and changes through shocks to the outflow and inflow the research and policy focus has generally been on the outflow process or equivalently unemployment duration a glance at figure 1 shows why this might be so it reveals a very strong co movement of the unemployment rate and the proportion of the unemployed out of work for a year or more analysts have used data like this to argue that the source of unemployment fluctuations has been changes in the outflow process 1 possibly as a consequence of this most policies directed at reducing unemployment focus on improving the search effectiveness and employability of the currently unemployed the unemployment flows and stock are related in quite complex ways and in this paper we focus on these inter related dynamics the model we use allows them to be linked in two ways first there is the simple accounting relationship whereby shocks to the flows accumulate in the stock second search and matching models suggest behavioural relationships of the flows depending on unemployment the presence of the nonlinear accounting identity in the model makes the analysis of the joint system problematic so we proceed sequentially investigating first one link and then the other we find that for the uk the bulk of the correlation between duration and the unemployment stock displayed in figure 1 arises from the dependence of the former on the latter we find a strong dependence of the outflow rate on unemployment taking careful account of the inter temporal identity on the other hand outflow shocks have contributed little to the evolution of unem

mitigating procurement hazards in the context of innovation this paper extends the transaction cost economics framework to examine the contractual hazards that arise in the course of technological innovation we identify three main strategic hazards related to future technological opportunities that may develop in business transactions loss of technological pacing possibilities on the technological frontier loss of technological control at or behind the frontier and design omissions in examining these hazards we focus on the increasingly common phenomenon of vertically integrated firms supplying downstream competitors we then analyze how constellations of safeguards particularly relational safeguards can augment transaction specific safeguards in many instances to ensure high powered incentives are maintained we also consider under what conditions downstream divestiture is a desirable economizing option supportive illustrations are drawn from the desktop laser printer and telecommunications industries this abstract was borrowed from another version of this item

licensing in the theory of innovation this article analyzes licensing in a noncooperative r d game we ask two questions what are the incentives for licensing a production technology and what is the impact of licensing on the pattern of innovation and the consequent evolution of industry costs and market structure the gainsfrom trading information through licensing contracts are achieved through the replacement of inefficient production techniques the ex post incentive and the elimination of inefficient research expenditures the ex ante incentive in a duopoly the availability of licensing encourages research when the firms initial production technologies are close in costs and discourages research when initial costs are asymmetric

technology transfer under asymmetric information licensing contracts for newly patented innovations are observed to vary along several dimensions including the form and size of the payment to the inventor fixedfee versus some output based royalty the degree of exclusivity and the division of rents in this article we show that theform of the contract can be explained by two problems in technology exchange the superiority of a licensor s precontractual information about the economic value of the innovation and thefact that sharing this information with the licensee mayfacilitate imitation we show that a licensor signals her technology type with an output based payment or royalty and may leave some of the rents with the licensee conditions under which exclusive license contracts linear and nonlinear and nonexclusive linear contracts are used to transfer technology are identified

changes in business cycles evidence and explanations this paper shows that the volatility of annual real macroeconomic indicators for the united states and the average severity of recessions have declined only slightly between the pre world war i and post world war ii eras recessions have however become somewhat less frequent and more uniform it argues that the advent of macroeconomic policy after world war ii can account for both the observed continuity and change countercyclical monetary policy and automatic stabilizers have prolonged postwar expansions and prevented severe depressions at the same time policy induced booms and recessions have led to continued volatility of the postwar economy

incentive conflicts and contractual restraints evidence from franchising abstract this study uses agency theory to develop testable implications about three provisions commonly observed in franchise contracts 1 restrictions on passive ownership 2 area development plans and 3 mandatory advertising expenditures the primary hypothesis is that these provisions are most likely when there are significant externalities among the units within the franchise system the evidence based on a large sample of franchise contracts is generally consistent with this hypothesis the evidence also suggests that these incentive instruments are complements in contrast to the theory most of the results do not support the hypothesis that the percentage of company owned units is related to externalities within the system franchisee risk aversion and or wealth constraints appear more important while the study focuses on franchising the results provide insights into related provisions in other contracts

vacancy posting job separation and unemployment fluctuations abstract what is the relative importance of hiring and separation in driving unemployment fluctuations this paper presents a framework to decompose the moments of unemployment and study the respective contributions of vacancy posting a measure of firms hiring efforts and separation separation accounts for about 40 of unemployment s variance compared to 60 for vacancy posting and contributes to about 60 of unemployment steepness asymmetry the fact that unemployment increases faster than it decreases further while vacancy posting is on average the most important contributor of unemployment fluctuations the opposite is true around business cycle turning points when separation is responsible for most of unemployment movements

on the determinants of uk unemployment and the great recession analysing the gross flows data this article provides a detailed analysis of the gross worker flows data in the united kingdom between 1997 and 2010 with particular emphasis on the 2008 2009 recession and its aftermath utilizing flows data from the labour force survey lfs the dominant macroeconomic factors driving unemployment in the united kingdom before during and after the recessionary period are identified amongst the salient findings of this article is a striking decline in job to job movements throughout and beyond the recent recession this discovery adds a new dimension to the existing literature in this field

double sided moral hazard and the nature of share contracts contractual arrangements involving revenue profit sharing are often based on fairly simple often linear rules in addition in many contexts these contracts are not finely adjusted to the particular circumstances of individual agents or markets nor do they vary over time to the extent current theories based on optimal contracting suggest they should we develop a simple model of such revenue or profit sharing arrangements based on double sided moral hazard and show that this model can account for many of these stylized facts more specifically the model shows that linear contracts can be optimal and that benefits from customizing terms can in some cases be quite limited if not zero

the structure of payments as a way to alleviate contractual hazards in international technology licensing this article proposes an empirical model in which the option of choosing between royalties fixed payments or a combination of the two is made to mitigate contractual hazards in licensing contracts we examine licensing contracts between spanish and foreign firms during the 1960s and early 1970s using a new data source of 925 contracts the link between patenting and licensing is also analyzed the work provides evidence to support the hypothesis that the moral hazard problem truly influences the type of payment established in arm s length contracts when there is an important technological gap between unaffiliated firms this study also shows that the payment chosen depends on the size of the licensee firm copyright 2009 the author 2009 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

swedish business cycles 1861 1988 abstract we examine swedish business cycle data for 1861 1988 in the time domain as well as in the frequency domain there is evidence of a business cycle in the form of considerable spectral mass for cycles between three and eight years the variability of the series varies considerably over time for most series it is highest in the inter war period relative variability is fairly stable over time cross section ratios between moving standard deviations for the series do not change much comovements are also stable over time correlation coefficients do not change much either

u s labor market dynamics revisited the picture of u s labor market dynamics is opaque empirical studies have yielded contradictory findings and debates have emerged regarding their implications this paper aims at clarifying the picture which is important for the understanding of the operation of the labor market for the study of business cycles for the explanation of wage behavior and for the formulation of policy the paper determines what facts can be established what are their implications and what remains to be further investigated the main contributions made here are i listing of data facts that can be agreed upon these indicate that there is considerable cyclicality and volatility of both accessions to employment and separations from it hence both are important for the understanding of the business cycle ii presenting the business cycle facts of key series iii pointing to specific gaps in the data picture disparities in the measurement of the sizeable flows between employment and the pool of workers out of the labor force disagreements about the relative volatility of job finding and separation rates across data sets and the fact that the fit of the gross flows data with net employment growth data differs across studies and is not high the definite characterization of labor market dynamics depends upon the closing of these data gaps

have economic fluctuations been dampened a look at evidence outside the united states abstract until recently economists of all beliefs took it for granted that the severity of economic fluctuations had decreased sharply following world war ii recent work has challenged this view this study attempts to shed light on whether there was a true reduction in the severity of economic fluctuations by examining the experience of six european countries with one exception these countries did not experience a substantial reduction in the severity of the business cycle

house prices and job losses why are house prices 80 correlated with job losses over the uk business cycle my paper studies this striking fact together with the strong comovements between house prices and labour market variables in general first a regional panel is estimated to quantify the impact of house prices on the unemployment job finding and job separation rates whereby rejection rates of planning applications are used as instruments to find exogenous variation in house prices second an orthogonalised var is used to estimate the aggregate impact of house price shocks both methods confirm the large impact of house price shocks on labour market variables and credit supply to understand the mechanism a general equilibrium model with collateral constraints endogenous job separation and housing shocks is confronted with macroeconomic data via bayesian methods the results suggest that shocks to house prices i explain about 10 of output fluctuations and about 20 of fluctuations in corporate credit unemployment and job separation rates via the collateral channel over the forecast horizon and ii were a major cause in triggering the 1990 and 2008 recessions in the uk

fees versus royalties and the private value of a patent we compare how much profit an owner of a patented cost reducing invention can realize by licensing it to an oligopolistic industry producing a homogeneous product by means of a fixed fee or a per unit royalty our analysis is conducted in terms of a noncooperative game involving n 1 players the inventor and the n firms in this game the inventor acts as a stackelberg leader and it has a unique subgame perfect equilibrium in pure strategies it is shown that licensing by means of a fixed fee is superior to licensing by means of a royalty for both the inventor and consumers only a drastic innovation is licensed to a single producer

current account and macroeconomic fluctuations the primary purpose of this study is to establish some stylized facts about current account and macroeconomic fluctuations in sweden another purpose is to propose a multivariate detrending technique which is based on a time series model with common stochastic trends this technique should be useful for establishing stylized facts about macroeconomic fluctuations in general the descriptive statistics in this analysis are thus confined to the transitory components of the time series in contrast with results obtained for other countries we find e g that the current account is procyclical

the cyclicality of the separation and job finding rates in france abstract in this paper we shed light on the relative contribution of the separation and job finding rates to french unemployment at business cycle frequencies by using administrative data on registered unemployment and labor force surveys we first investigate the fluctuations in steady state unemployment and then in current unemployment in order to take into account the unemployment deviations from equilibrium both data sets lead to quite similar results both rates contributed to unemployment fluctuations during the nineties 50 50 split while in the last decade the job finding rate was more significant and explained around 65 of the french unemployment fluctuations in particular the last business cycle episode including the last recession exacerbated the role of the job finding rate we then show that the predominant role of the job finding rate in the last decade holds when the economy is hit by aggregate business cycle shocks moving unemployment and vacancies along the beveridge curve

how the ins and outs shape differently the u s unemployment over time and across frequencies abstract although the u s case has been studied extensively the importance of job finding and separation rates to unemployment variability remains unsettled the aim of this paper is to contribute to this debate by adopting a novel lens wavelet analysis we resort to wavelet analysis to unveil time and frequency varying features regarding the contribution of the job finding and job separation rates for the u s unemployment rate dynamics drawing on this approach we are able to reconcile some apparently contradictory findings reported in previous literature we find that the job finding rate is more influential for the overall unemployment behaviour but the job separation rate also plays a critical role especially during recessions in particular the job separation rate accounts for on average 53 per cent of the unemployment variability at short run fluctuations during recessions in sharp contrast with an overall contribution of 21 per cent over time and across frequencies

contracting for tacit knowledge the provision of technical services in technology licensing contracts abstract recent research on the economic payoff from new technology has emphasized the importance of tacit knowledge or know how this paper shows that arm s length contract can overcome the problems in contracting for know how by bundling complementary inputs with know how in a technology package and leveraging the superior enforceability of contracts over the latter in the empirical part of this paper the relationship between bundling and transfer of know how is analyzed using indian data the results imply that tied sales of inputs may increase the efficiency of contracts involving the transfer of know how a striking result in the context of the current north south debates on intellectual property rights is the packaging of patents with know how

volatility and persistence of fluntuations individual production series in italy 1890 1985 the analysis is focused on possible time related changes in the cyclical behaviour of production using a set of individual production series disaggregate data are used to analyse whether short run fluctuations have actually become less extreme or erratic in time and whether the tendency of shocks to have permanent or transitory effects has changed between the pre war and post war eras a third aspect of cyclical trends examined concerns the correlation of short term changes across sectors the main finding of the paper is that there has been little change in the behaviour of the individual series over time in fluctuation size persistence and frequency thus a reduction in variability appears also to be due to a problem of statistical measurement rather then suggesting as the standard literature does that demand shocks were unimportant in the post war period which implies that supply shocks were more important an estimate of the italian experience gives evidence of the importance of both causes

minimum bill contracts theory and policy this paper examines the efficiency implications of minimum bill cont racts and concludes that minimum bill provisions promote rather than impede efficient adaptation to changing circumstances in particular minimum bills provide a simple mechanism by which parties faced wit h uncertain demand and rising marginal cost can approximate joint pro fit maximizing payment schedules in transaction specific relationship s governed by long term contracts the paper also questions the merit of proposals for legislative or regulatory intervention to reduce mi nimum bill obligations in natural gas contracts and considers the ap propriate legal status of these provisions in the event of contractua l failure copyright 1988 by blackwell publishing ltd

employment efficiency and sticky wages evidence from flows in the labor market i consider three views of the labor market in the first wages are flexible and employment follows the principle of bilateral efficiency workers never lose their jobs because of sticky wages in the second wages are sticky and inefficient layoffs do occur in the third wages are also sticky but employment governance is efficient i show that the behavior of flows in the labor market strongly favors the third view in the modern u s economy recessions do not begin with a burst of layoffs unemployment rises because jobs are hard to find not because an unusual number of people are thrown into unemployment

the beveridge curve a survey important progress has been made in economists understanding of the beveridge curve from its measurement to its expression in canonical labor market models yet enduring puzzles remain chief among these are the empirical role of vacancies in the recruitment process the amplitude comovement and persistence of cyclical unemployment vacancy dynamics and the sources of lateral shifts in the beveridge curve the synthesis of these themes identifies several priorities for ongoing research including the role of entry costs into vacancy creation in shaping beveridge dynamics the cyclicality of search intensity both off and on the job and its relation to participation and job to job transitions the theory and measurement of mismatch and the sources of hysteresis in unemployment flows

the effect of shocks to labour market flows on unemployment and participation rates this article presents an analysis of labour market dynamics in particular of flows in the labour market and how they interact and affect the evolution of unemployment rates and participation rates the two main indicators of labour market performance our analysis has two special features first apart from the two labour market states employment and unemployment we consider a third state out of the labour force second we study net rather than gross flows where net refers to the balance of flows between any two labour market states distinguishing a third state is important because the labour market flows to and from that state are quantitatively important focusing on net flows simplifies the complexity of interactions between the flows and allows us to perform a dynamic analysis in a structural vector autoregression framework we find that a shock to the net flow from unemployment to employment drives the unemployment rate and the participation rate in opposite directions while a shock to the