Ronald Schettkat

The end of full employment? On economic development in industrialized countries

In view of high and rising jobless rates in the industrialized countries the solution of the unemployment problem becomes a cardinal question for politicians and economists. What factors have determined the unemployment trend since the 1960s and what conclusions can be drawn for employment policy?

Analyzing rebound effects

Are efficiency improvements in the use of natural resources the key for sustainable development, are they the solution to environmental problems, or will second round effects - so-called rebound effects - compensate or even overcompensate potential savings, will they fire back? The answer to this question will have fundamental policy implications but the research on rebound effects does not provide clear results. This paper aims to clarify the theoretical basis of various analytical approaches which lead to widely different estimates of rebound effects.

The Growth of Service Industries

Problems arise if budgets for services are held constant whilst prices rise. Education, cultural activities and health services are under constant budgetary pressure. The authors argue that the price of commodities is linked to demand and price increases would therefore seem to threaten the very existence of these services. The paradox of these services is that in spite of their exploding costs, demand persists.

Employment Protection and Labour Mobility in Europe: an empirical analysis using the EU's labour force survey

Does dismissal protection stabilise employment contracts? This study analyses whether the different dismissal laws in the EU countries have an impact on employment stablitiy or, to put it the other way around, whether worker mobility is higher in less regulated labour markets. The paper first discusses the national dismissal laws and some methodological issues and then presents an econometric anaylsis of data from the EUs labour force survey. The study concludes that national regulations have an impact on employment stability but that industry-specific variables and the macroeconomic situaion are also important.

THE ASTONISHING REGULARITY OF SERVICE EMPLOYMENT EXPANSION

An update of Victor Fuchs analysis shows an astonishing regularity of the relationship between per capita income and service industry employment. The two major theoretical hypotheses for the growth of the service sector, shifts in final demand towards services and the technological stagnancy of services, are then analyzed. Theories achieve simplicity and clarity from radical assumptions and it is therefore not surprising that empirically both dimensions are relevant. Shifts in final demand to services-especially of private consumption, however, gained importance over the last decades indicating a fundamental change of the division of labor: the marketization of household production, which is analyzed finally. Copyright

Small economy macroeconomics

In recent years, four small European economies—Austria, Denmark, Ireland and the Netherlands—have attracted attention through their successful employment policies. Why did these countries, which are all typical European welfare states with high levels of social security, high tax rates and low inequality, perform so well? Can they serve as examples for the rest of unemployment-ridden Europe?

The impact of taxes on female labour supply

There is little agreement in economics on the factors influencing labour supply and hence on the impact of taxes. Within the marginal model, real wages and incomes are directing peoples labour market behaviour independent of time and space, whereas the human resources approach takes account of the social environment and past behaviour. Even if strong assumptions are made, the neoclassical theory cannot predict the outcome of a wage increase. The labour supply response depends on the relative strengths of the substitution and the income effect. Since nonparticipation in the labour market is explained by a reservation wage being higher than the market wage, this is the only situation in which neoclassical theory would predict a rise in labour force participation with a wage increase. This case occured in a ‘natural experiment’ in Sweden. The Swedish tax system changed in 1971 from joint to separate taxation of spouses resulting in a substantial increase in the net wage of married women. This article invest...

Economic policy proposals for Germany and Europe

1. Introductory Summary: Prosperity for Germany and Europe Ronald Schettkat 2. Broadening the Discussion of Macroeconomic Policy Robert M. Solow 3. Monetary Policy and the Real Economy Paul de Grauwe and Claudia Costa Storti 4. Germany in the Monetary Union, Charles Wyplosz 5. Reforms, Macroeconomic Policy and Economic Performance in Germany Wendy Carlin and David Soskice 6. Exportweltmeister: So What? - Better Goals for German Foreign Economic Policy Adam Posen 7. Wanted: A New German Wirtschaftswunder Richard B. Freeman

Price discrimination between EU regions

Prices of identical products differ tremendously among EU countries. Prices of IKEA products range by more than 40% on average, which is far more than the 12% price difference the EU Commission regards as compatible with competitive markets. These price differences can only partly be attributed to differences in non-tradable cost components between countries (such as wage costs or value-added taxes). The economic explanation for this phenomenon is that consumers are hardly aware of differences in prices across countries and that transportation costs are too high to make arbitrage profitable. Market intransparency for the consumer allows firms to discriminate between regional markets. However, knowledge of market-specific demand conditions is very limited leaving firms to find the profit maximising price in a trial-and-error process. Copyright (c) 2003 by the Royal Dutch Geographical Society KNAG.

Institutions and employment performance in different growth regimes

In the 1990s, institutional and evolutionary economics emerged as one of the most creative and successful approaches in the modern social sciences. This timely reader gathers together seminal contributions from leading international authors in the field of institutional and evolutionary economics including Eileen Appelbaum, Benjamin Coriat, Giovanni Dosi, Sheila C. Dow, Bengt-ake Lundvall, Uskali Maki, Bart Nooteboom and Marc R. Tool. The emphasis is on key concepts such as learning, trust, power, pricing and markets, with some essays devoted to methodology and others to the comparison of different forms of capitalism. An extensive introduction places the contributions in the context of the historical and theoretical background of