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This paper provides more insight into the assumption of human capital theory that the productivity of job-related training is driven by the improvement of workers’ skills. We analyze the extent to which training and informal learning on the job are related to employee skill development and consider the heterogeneity of this relationship with respect to workers’ skill mismatch at job entry. Using data from the 2014 European Skills and Jobs Survey, we find – as assumed by human capital theory – that employees who participated in training or informal learning show greater improvement of their skills than those who did not. The contribution of informal learning to employee skill development appears to be larger than that of training participation. Nevertheless, both forms of learning are shown to be complementary. This complementarity between training and informal learning is related to a significant additional improvement of workers’ skills. The skill development of workers who were initially underskilled for their job seems to benefit the most from both training and informal learning, whereas the skill development of those who were initially overskilled benefits the least. Work-related learning investments in the latter group seem to be more functional in offsetting skill depreciation than in fostering skill accumulation.

In this chapter we review the recent and growing literature on medium-term growth patterns. This strand of research emerged from the realization that for most countries economic development is a highly unstable process; over a course of a few decades, a typical country enjoys periods of rapid growth as well episodes of stagnation and economic decline. This approach highlights the complex nature of growth and implies that studying transitions between periods of fast growth, stagnation, and collapse is essential for understanding the process of long run growth. We document recent efforts to characterize and study such growth transitions. We also update and extend some of our earlier research. Specifically, we use historical data from Maddison to confirm a link between political institutions and propensity to experience large swings in growth. We also study the role of institutions and macroeconomic policies, such as inflation, openness to trade, size of government, and real exchange rate overvaluation, in the context of growth transitions. We find surprisingly complex effects of some policies. For example, trade makes fast growth more likely but also increases the frequency of crises. The size of government reduces the likelihood of fast miracle-like growth while at the same time limiting the risk of stagnation. Moreover, these effects are nonlinear and dependent on the quality of institutions. We conclude by highlighting potentially promising areas for future research.

Labour markets across the globe have recently been characterized by rising wage inequality, real wage stagnation or both. Most academic work to date considers each in isolation, but the research in this paper attempts to pull them together, arguing that higher wage inequality takes on an added significance if real wages of the typical worker are not growing, and showing that inequality rises and real wage slowdowns have gone hand-in-hand with one another due to wages decoupling from productivity in the United States and United Kingdom. The lack of growth of real wages at the median in the United States is also shown to be linked to the declining influence of trade unions.

Paul Samuelson was attracted to the irregular economic development pattern of some South American countries because of the links between economic performance and political factors. He discussed the influence of “populist democracy” on Argentina’s relative economic stagnation, which, he argued in the 1970s and early 1980s, served as a dangerous paradigm for the American economy under stagflation. Stagflation phenomena marked the end of Samuelson’s “neoclassical synthesis.” Moreover, he applied his concept of “capitalist fascism” to deal with military dictatorships in Brazil and (especially) in Chile. The Brazilian translation of his Economics in 1973 brought about a correspondence with Brazilian economists about the “fascist” features of the regime. The main variable behind the South American economic and politically unstable processes discussed by Samuelson was economic inequality, which became also a conspicuous feature of the American economy since the adoption of market-based policies in the 1980s and after.

In an effort to explain the growth stagnation that hampered the United States in the period from the mid-1970s to the mid-1990s, mainstream economists unwittingly and incompletely reinvented the concept of unproductive labor that is rooted in classical and Marxian economics. The price to pay for having ignored this concept had been unexplained economic events, inappropriate policy, and relative national economic decline. The mainstream economists' attempt to adopt this concept came at a cost to their theoretical core. The abandonment of the concept came at a cost to the real economy represented by the financial crisis of 2008.

The author examines the argument elaborated by Pigou in his Employment and Equilibrium. A Theoretical Discussion which was the first comprehensive answer Pigou gave to the analysis put forward by Keynes in his General Theory. The chapter consists of seven sections. In the first, the motivation of the chapter is outlined. In the second, third, and fourth sections, the author will concentrate on how Pigou elucidates the conditions necessary for an economic system to attain a short period flow equilibrium. In this context, the author elaborates an “open” macro model which can be “closed” in two different ways. The chapter will also present a diagrammatic analysis of Pigou’s theory in the two cases elucidating the structure and the working of the model. Differences with the author’s previous book (TU) related to (real/monetary) wage inflexibility and the importance of monetary factors are also described and discussed. Pigou however does not limit himself to deal with the short period but engages in an interesting discussion of the long period centered on the notion of stationary state that is the object of section five. In this way, he admits that Keynes’s theory is not limited, to the short run. In arguing along these lines, he comes close to describe what will be recognized later as the Pigou effect. A short comparison with the renewed stagnationist theory is sketched. The sixth section includes a brief discussion of the comparative statics and dynamic analyzes elaborated by Pigou. A final section including a few conclusions completes the chapter.