The Mirrlees Review recommends that commodity taxation should in general be uniform, but with some goods consumed in conjunction with labour supply (such as child care) left untaxed. This article examines the validity of this claim in an optimal income tax framework. Contrary to the recommendation of the review, our theoretical results imply that even if all goods other than the good needed for…

Although several studies have examined the link between competition and average earnings and others have focussed on the magnitude and determinants of establishment wage differentials, very little is known about the effect of competition on the intra-industry dispersion of earnings. Using a comprehensive data set on the incidence of price-fixing across British manufacturing industries in the 19…

We examine whether the information contained in social media (Twitter, Facebook, and Google blogs) and web search intensity (Google) influences financial markets. Using a multivariate system and focussing on Eurozone�s peripheral countries, the GIIPS (Greece, Ireland, Italy, Portugal, and Spain) as well as two of Eurozone�s core countries (France and the Nethelands), we show that soc…

This article studies the stabilization effect of monetary policy reacting to asset price, accounting for the expectations formation effect of policy regime shift, in a DSGE model calibrated to the US economy. In contrast to the linear policy rule that generates negligible stabilization effect from responding to asset prices, the regime switching policy rule can significantly stabilize inflation…

A large literature links currency crashes and reversals in a country�s net external borrowing to output losses. In this article, we find that contractions in the stock of gross foreign claims on a country�a phenomenon we call gross foreign investment reversals (GIRs)�are also associated with output declines. GIRs are specially harmful during currency, current account, and sudden …

In this article we estimate the effect of spousal labour force participation on the participation of older men in Australia. We find that the decision of a wife to work or not influences positively, and in a causal fashion, the decision of her husband to work or not. We use counterfactual analysis to estimate the impact of the increasing labour force participation of a wife on her husband�…

Studies suggest research productivity falls after tenure. We have limited choicetheoretic understanding of why this should occur. We rationalize this as follows. Some scholars are assumed to be �specialists�: their research productivity consists of transforming dissertation chapters into publishable papers. We show how a department that hired such a scholar provides incentives to maxi…

Drawing on psychological theories of social identity and cognitive dissonance, we develop a dynamic model for the evolution of female labour supply. We assume that agents, in addition to consumption and leisure, also derive utility from complying with social and personal norms such that deviations from norms induce psychological costs. An important contribution is that we allow for conflicting …

Increases in standard hours of work have been a contentious policy issue in Germany. Whilst this might directly lead to a substitution of workers by hours, there may also be a positive employment effect due to reduced costs. Moreover, the response of firms may differ between firms that offer overtime and those that do not. For a panel of German plants (2001�2006) drawn from the IAB Establi…

We construct a simple model incorporating various urban labour market phenomena obtaining in developing economies, and we give a diagrammatic formulation of the market equilibrium. Our initial formulation assumes an integrated labour market and allows for entrepreneurship, self-employment, and wage employment. We then introduce labour market segmentation. In equilibrium voluntary and involunta…