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The paper studies one of the puzzles of modern economics. Why does Western Europe have 20 million unemployed workers? This is more than 10% of the workforce. Yet in the 1950s and 60s, unemployment rates were consistently less than 3%. The paper provides evidence for four ideas*. 1. Unemployed people are very unhappy. 2. Oil prices explain the main cycles in(More)
This paper represents the views and analysis of the authors and should not be thought to represent those of the Bank of England. We thank Wiji Arulampalam, Steve Bond, two anonymous referees and colleagues at the Bank of England, in particular Lucy Chennells, for comments and discussions. The usual disclaimer applies. The Bank of England's working paper(More)
The views expressed in this paper are those of the authors, and not necessarily those of the Bank of England. We thank on Finance and Consumption and three anonymous referees. The data employed were originally collected by the ESRC Research Centre on Micro-Social Change at the University of Essex. Neither the original collectors of the data nor the Data(More)
The views expressed are those of the authors and do not necessarily reflect those of the Bank of England. The authors would like to thank Mervyn King especially for providing the motivation for this paper. We are indebted to the help and assistance of the London School of Economics, and in particular Richard Jackman, in making the experiment possible.(More)
We estimate elasticities of scale in the demand for money by firms using firm level panel data from Spain, the UK, and the US. This elasticity is one for Spain and the UK but smaller for the US. We find that the errors in the money demand equations contain two terms that are correlated with sales. Firstly, a permanent firm effect that captures differences(More)
and seminar participants at the Banco de Es-paña for discussions and comments. We also thank the Central Balance Sheet Office of the Banco de España for providing the data. The views expressed are those of the authors and should not be attributed to the Banco de España. Abstract: This paper examines financial pressure facing Spanish companies. A number of(More)