This paper describes the Cambridge Multisectoral Dynamic Model (MDM) of the UK economy and uses it to analyse the effects of tax reductions, public expenditure increases and a change in the Sterling exchange rate. The use of the model to analyse a policy package is illustrated by an exercise which measures the effects of the UK government's Medium-Term Financial Strategy 1979-1983. The paper concludes ...
To date, we find abundant evidence that unemployment leads to reduced wages upon re-employment (e.g. Arulampalam, 2001; Burda and Mertens, 2001; Gangl, 2006) and also negatively affects other job quality outcomes (Brand, 2006). We still lack a systematic account of scarring trends over time, however. One central goal of our contribution is to fill this gap and investigate how scar effects in...
