The Unassuming Economist

From a paper by Nauro F. Campos, Vera Z. Eichenauer, Jan-Egbert Sturm:

“The average unemployment rate in Europe has been consistently higher than in the United States since 1980. The main explanation offered by a rather large economics literature focuses on the interaction between institutions and shocks. The contribution of this paper is twofold: to assess whether this prevailing explanation still holds when we take into account recent shocks (globalisation, China, etc.) and time-varying labour market institutions; and to offer a decomposition (using the Shapley-Owen approach) of the relative contributions of shocks, institutions and their interactions. While our results confirm the general validity of the Shocks and Institutions Hypothesis, we argue that it is more complex and nuanced than originally formulated.”