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The purpose of this paper is to explore the ability of monetary policy to generate real effects in laboratory general equilibrium production economies.

To understand why monetary policy is not consistently effective at stabilizing economic activity, the author vary the types of agents interacting in the economy and consider treatments where subjects are playing the role of households (firms) in an economy where automated firms (households) are programmed to behave rationally.

While the majority of participants’ expectations respond to monetary policy in the direction intended, subjects do form expectations adaptively, relying heavily on past variables and forecasts in forming two-steps-ahead forecasts. Moreover, in the presence of counterparts that are boundedly rational, forecast accuracy worsens significantly. When interacting with automated households, updating firms’ prices respond modestly to monetary policy and significantly to anticipated marginal costs and future prices. The greatest deviations in behavior from theoretical predictions arise from human households (HH). Households persistent oversupply of labor and under-consumption is attributed to precautionary saving and debt aversion. The results provide evidence that the effects of monetary policy on decision making hinge on the distribution of indebtedness of households.

The author present causal evidence of the effects of potential bounded rationality on agents’ consumption and labor decisions.

This paper constructs real wage series for nineteenth-century Algeria and Tunisia, and compares them with existing Egyptian and Syrian series. Archival sources are used for price and nominal wage data. Following Allen (2001), nominal wages are deflated with a consumer price index. The series are tested for robustness. Real wages were initially dispersed, but converged to similar levels by the end of the period. There is no evidence of a broad-based improvement in living standards over the period, with real wage series declining in Algeria, and stagnating in Egypt, Tunisia and Syria. The findings paint a less optimistic picture of living standards compared to other measures like GDP per capita and compared to some of the historical literature. Data for the Maghreb are scarce, and more work will need to be done on finding more wage and price observations.

Several Phillips curve models are presented and estimated with Chilean annual data for 1963–1982. Because of unreliable unemployment statistics, the real wage level is used to represent labour market disequilibrium. The Cortázar‐Marshall inflation index, alternative to the official one, and four different earnings variables are used. Equilibrium levels of earnings and equilibrium differentials are obtained. Market forces, expected inflation, structural change after 1973, and exogenous elements represented by a trend are all statistically significant; government‐determined minimum wage rates and union membership are not. There is no evidence of partial adjustment, and all equilibrium differentials increased during the period.

The purpose of this paper is to contribute to the literature on demand-driven Keynesian growth in open economies by developing a formal model that combines Dixon and Thirlwall’s (1975) export-led growth model and Thirlwall’s (1979) balance-of-payments constrained growth model into a more general specification. Then, based on the model developed in this paper, the authors analyse more broadly some important issues concerning the net impact of currency depreciation on the short-run growth.

The authors build upon Dixon and Thirlwall’s (1975) export-led growth model and Thirlwall’s (1979) balance-of-payments constrained growth model in order to develop the theoretical framework. The authors also run numerical simulations to illustrate the net impact of devaluation on the short-run growth rate in different scenarios.

The authors demonstrate that the net impact of currency devaluation on growth can go either way, depending on some structural conditions such as the average share of imported intermediate inputs in prime costs of domestic firms and the institutional capacity of trade unions to set nominal wages through the bargaining process. The model also shows that the effectiveness of a competitive real exchange rate to promote growth is higher in countries where the share of labour in domestic income is also higher.

This paper provides a coherent formal starting-point for further theoretical developments on the interrelatedness between currency devaluation, income distribution and growth. These findings provide empirically testable hypothesis for future research.

The present study proposes an alternative formal solution for the theoretical problem of imposing a balance-of-payments constraint on the process of cumulative causation often incorporated in Kaldorian growth models. In terms of policy, the framework sheds further light on the relevance of income distribution and the labour market institutional framework for the dynamics of the exchange rate pass-through mechanism and allows us to map out related conditions under which currency devaluation can promote growth.

The aim of this article is to explore the current European debate over labour market flexibility. First, it considers lessons from economic theory. The classical consensus considering unemployment to be purely voluntary, the Keynesian consensus introducing the concept of demand deficient involuntary unemployment and finally the neo‐classical consensus returning us to the classical viewpoint of the dominance of real conditions in the labour market. In order to proceed without confusion the article provides a clear working definition of the natural rate of unemployment and its three main components, voluntary unemployment, structural unemployment and involuntary unemployment. It then proceed to analyse each of these main components in detail, illustrating the difference between a free market approach and a European Commission approach to reducing each component of unemployment. The article concludes that the future is dependent on all EU citizens as electors of governments and holders of wages to moderate.

Looks at the impact John Maynard Keynes and the movement (Keynesian) he started had on the theory and practice of economics in the 1930s and onwards. Identifies respective problems about capitalism and discusses them in depth. States that the monetary and fiscal policies recommended by Keynes have helped the West escape severe social consequences in the aftermath of the Great Depression. Goes on to show how economists after Keynes carried his work forward and upward in the 1940s and 1950s. Closes by stating there is a further, third revolution in economic thinking on the rise.

This study presents estimates of the effect of changes in the real minimum wage on the employment ratio of three groups believed to be most vulnerable to changes in the minimum wage: teenagers, young adults, and adult high-school dropouts. It also examines the effect of the minimum wage on three sub-groups within each of these larger groups: males, females, and nonwhites. The data set was obtained from the monthly outgoing rotation groups of the Current Population Survey (CPS), Three Budgets for Urban Families, and the CPI-W for various urban areas. The sample period is 1979–1999.