This paper evaluates complementarities of labor market institutions and the business cycle in the context of a stochastic dynamic general equilibrium model economy. Matching between workers and vacancies with endogenous time spent in search, Nash-bargained wages, payroll taxation, and...

Main topics of the following analysis are the development of spatial structure and the question whether the economic disparities between agglomerations and peripheral areas will con- or diverge. Frequently, economic disparities are measured by per capita income. Because of the relationship...