A large amount of recent evidence finds a negative relationship between local unemployment and wages in OECD countries, a relationship christened a ‘wage curve’. This contradicts the conventional model of the labour market in which high unemployment regions have higher wages to compensate for search and other costs. This paper discovers a wage curve in South Africa, a country with several times...

In Bierens (1987) a Granger causal relation was found between unemployment and the interest rate for the Netherlands. In the present paper we will investigate whether there exists a simüar Granger causal relation between unemployment and interest rate for a number of other countries. It appears that, with our ARMAX modeling approach, this relationship is not confined to the Netherlands, but als...

a r t i c l e i n f o The objective of this paper is to analyze the efficiency consequences of monopoly from the perspective of an efficiency-wage model of unemployment based on Shapiro and Stiglitz (1984). An important feature of our model is that a firm can raise the probability that a shirking worker is detected by increasing its effort or investment in the monitoring of workers. Using this ...

For Britain, during the long period Phillips studied, an unemployment rate of about 2.5% was associated with a rise in wages of about 2% each year. Allowing for productivity growth, that was roughly consistent with stable prices. By and large, higher rates of unemployment were observed when prices were falling; lower rates were observed when prices were rising. The lower the rate of joblessness...

This paper studies the impact of productivity growth on the rates of worker ‡ows, and thus the unemployment rate. I …nd that in the U.S. labor market, faster productivity growth reduces the separation rate and the unemployment rate in the long-run. I incorporate disembodied technological progress, on-the-job search and sunk costs of creating job positions into a model of endogenous job separati...

In the discussions of trading, unemployment and income distribution inequality, this question is raised by economists that in economic development of developing and developed countries, which policy is necessary in the first stage. Is trading liberalization the pre-requirement of transfer from a close economy to a relative open economy and is it necessary for the developed economy compared to o...

This paper analyses the interaction between internal agency problems within firms and external search frictions when workers have private information. We show that the allocation of resources is determined by a modified Hosios Rule. We then analyze the effect of changes in the macro economic variables on the wage contract and the unemployment rate. We find that private information may increase ...

This paper attempts to examine the linkages among inflation, unemployment and crime rates in Malaysia. The sample period covered annual data from 1970 to 2006. The Bartlett corrected trace test proposed by Johansen (2002) was employed as being appropriate for small sample study. The corrected trace test affirmed the existence of long run equilibrium relationship between crime rate and its deter...