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« Incentives Matter | Main | Jeff Miron on the Twisted Incentives of the Bailout »

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I read a book on labor law in Italy one year ago and there was an essay written by an american jurist who said that in the last years (1985+, the book wasn't so new) there has been in american law a shift from the "employment at will" doctrine (a labour contract is just a contract) to more "subtle" interpretations, which increase the rigidity of the labour market. Never heard of it anywhere else. Can the american labour market be much closer to the european one than usually admitted?

David Henderson wrote a paper that was published in The Public Interest (1993) entitled: "The Europeanization of the U.S. labor market" and while I haven't reread the paper recently I remember at the time being persuaded by it.

Intrade thinks that there is about an 80% probability that in December 2009 the unemployment rate will be greater than 10%. It does not have a contract for August/September, but the chance of unemployment being greater than 11% in December 2009 is only about 25%.

"Could it be that the very remedies offered by the government are causing the problem?"

Or could it be that the problem was only in it's infancy when the stimulus was proposed? If this really is 'Great Depression II', then the big bad stuff was already in the pipeline.

Since the stimulus isn't even out of the gate, you are actually proposing that this was a garden variety recession and the fear of the stimulus has caused the economic decline since the Bill was enacted.

You've got a big challenge proving that claim.

Greg,

Ill-times and ill-targeted fiscal policy?

See http://caseymulligan.blogspot.com/2009/07/ill-timed-and-ill-targeted-stimulus.html

Pete

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