Lastly, the thesis tries to delve into the hierarchical structure of public employment serviceand addresses the problem of rent-seeking in the public sector by government bureaucrats.
Chapter 3 studies the wasteful effect of bureaucracy on the economy by addressing the linkbetween rent-seeking behavior of government bureaucrats and the public sector wage bill,which is taken to represent the rent component.
This thesis is composed of three core chapters on modern dynamic macroeconomics, whichstudy different aspects of the public sector labor market in a large EU economy with significant public employment share and a non-trivial public sector wage premium over theprivate sector labor compensation.
The study in this dissertation adds to earlier research byincorporating endogenous government hours and wages in the model framework and arguesthat the presence of a sizable public sector labor market in European economies generatessignificant interaction with the private sector labor and capital markets.
The chapter develops an empirical approach that exploits individual house price variation coming from the timing of refinancing events around the Great Recession.
There is a clear and robust effect of house prices on borrowing.
The effect can largely be explained by households using the value of their house as collateral. How changes in bank size affect the real economy is an important question in the design of financial regulation.
This chapter studies a natural experiment from postwar West Germany.
The results suggest that firms did not benefit when their banks became larger.
The findings are inconsistent with theories that argue the real economy benefits from increases in bank size.