Skip to main content

Über dieses Buch

Following the five books listed above on an earlier page, the Egon­ Sohmen-Foundation herewith submits its sixth volume. Once again, it is a collection of academic papers that were discussed at a symposium sponsored by the Foundation and subsequently revised. Readers not familiar with the Foundation may be interested to know that it was established in 1987 by Helmut Sohmen of Hong Kong in memory of his late brother, Egon Sohmen (1930-1977). Egon Soh­ men was an international economist highly respected in North America and in Europe, notably for his work on flexible exchange rates and on the economics of allocation and competition. Born in Linz (Austria) and educated as an economist in Vienna, Tiibingen, and Cambridge, Mass., Egon Sohmen held teaching posts in several places (M.I.T., Yale, Frankfurt, Saarbriicken, Minnesota, and Heidelberg). As an active participant in numerous international con­ ferences and workshops, he truly belonged to the international research community of his time and age cohort. His lasting reputation greatly helped me to convene the active participants of this symposium.



The Historical Record


Unemployment and the Structure of Labor Markets: The Long View

Understanding the causes of high unemployment requires first understanding the structure of labor markets. The latter is necessarily a historical agenda, since it is only over time that one observes significant variation in the socioeconomic institutions structuring labor market outcomes. While some investigators have fruitfully adopted international comparisons as a way of gaining purchase on institutional variation, contemporary labor markets share many common features, rendering the relevant variation fairly modest.
Barry Eichengreen

Doing It Right? The U.S. Labor Market Response to the 1980s–1990s

Many European analysts and policymakers view the U.S. labor market as a paradise of neoclassical flexibility. Wages respond rapidly to changes in supply and demand in local labor markets with little institutional intervention. Jobs are readily created for those who seek them. Firms hire and fire at will, with little government or union restrictions. Spells of unemployment are short in duration, and unemployment benefits modest. As a result, the story goes, the United States has avoided the long extensive joblessness that has characterized Europe since the early 1980s.
Richard B. Freeman

Unemployment in the OECD and Its Remedies

There is evidence today of dramatic changes in the labor market as a result of competition between low-wage “emerging-market” economies and the rich OECD countries. In previous work I and others (for example, Bean, Layard, and Nickell, 1986; Davis and Minford, 1986; Layard and Nickell, 1985; Minford, 1983; and see Layard, Nickell, and Jackman, 1991, for other relevant work) have explored how far one can account for changing unemployment in the OECD through general equilibrium models of the open economy. These models have used conventional “elasticities” equations for the current account, assuming that the prevailing competition facing OECD countries was imperfect competition in manufactures from other OECD countries.
Patrick Minford

Europe’s Present Unemployment Crisis


Immigration and the European Labor Markets

The public debate on the economic effects of migration is ancient. It is back again in Europe, as always charged with social emotions and political undertones. Widely held fears that immigrants displace national workers through underbidding of wages and working conditions appear to be backed by casual observation. Quite regularly, the media reveal cases of illegal immigrants working long hours at extremely low wages, powerfully suggesting that both immigrants and native workers suffer from migration. Yet, in striking contrast, the economic literature fails to theoretically predict and empirically document unambiguously adverse effects from migration. In fact, in the long run when prices and wages are flexible, immigration is more likely to raise welfare in both origin and recipient countries. Freeman (1993) observing that few economists actually go on to support free migration suggests that the economic theory of migration must be modified to account for economically motivated resistance to immigration.
Charles Wyplosz

Foreign Trade, Wages, and Unemployment

World trade has increased about twice as rapidly as world output during the past two decades. Most countries have both become more open with respect to imports and have seen a sharp growth in imports (and hence exports as well). Phased trade liberalization agreed on during the Kennedy and Tokyo multilateral trade negotiations (completed in 1975 and 1987, respectively) contributed to this result, as did the enlargement of the European Community from six to twelve members and the inauguration of the U.S.-Canada free trade area in 1989. But it was driven also by structural developments in the world economy, notably the great reduction in practical barriers to communication among national markets. Developing countries during this period have become major exporters of manufactured goods, which now account for over half of their nonoil exports.
Richard N. Cooper

Unemployment and the Crisis of the German Model: A Long-Term Interpretation

This paper presents an account of the reasons why the so-called German model finds itself in a serious and persistent crisis. The main point of the paper is that there are powerful long-term forces changing the structure of the German economy in a way that is at odds with the egalitarian philosophy of German-style collective wage bargaining and the relevant provisions of the welfare state. With appropriate qualifications, the point may equally apply to other European countries with a similarly constructed set of “corporatist” labor market institutions.
Karl-Heinz Paqué

Current Policy Issues


Reforming the Welfare State in Western Europe

As economists, we know that we do not know, and cannot know, the desirable degree and pattern of redistribution. But we agree on procedures: redistribution is desirable if it is voluntary—either in the form of private charity or by way of government transfers based on a general consensus. As economists, we know that giving may be in the interest of the giver and that, owing to externalities or economies of scale, collective giving may be more efficient than individual giving. As long as collective giving is voluntary, it is a Pareto improvement. The same is true for social insurance and social regulation. There is much scope for such a Paretian social policy that makes nobody worse off.
Roland Vaubel

Lessons for Employment and Growth in Western Europe

The main questions that we have to address are, to some extent, easily summarized. After the golden sixties, economic growth slowed down considerably and this change seems to have had quite different effects in different countries, particularly in terms of unemployment and income dispersion. Why? How can we promote growth? What can be done to cut European unemployment?
Henri R. Sneessens

Unemployment in Central and Eastern Europe: East Meets West

In his book Economic Behavior in Adversity, Hirshleifer (1987) describes the remarkable recovery of both Germany and Japan after severe bombing damage sustained during World War II. In particular, he makes note of the similar experiences in Hiroshima and Hamburg, which according to allied bombing reports were destroyed to considerably different degrees. His central conclusion from this experience as well as other catastrophic events over the past millennium is that the stock of human knowledge and talents is more decisive for rapid recovery from economic adversity than the lack of physical equipment and structures. In the words of Marshall, “the most valuable of capital is that invested in human beings.”
Michael C. Burda


Weitere Informationen