Publication

This paper analyzes labor performance in the Western world. It states that Anglo-Saxon countries were successful in the 1990s concerning labor market performance compared to the former role models of Germany and Japan. The authors argue that this reversal in relative economic performance might be related to idiosyncracies in financial markets, with bank-based financial markets as in Germany and Japan being possibly inferior to stockmarket-based financial markets in turbulent times and when approaching the economic frontier. The paper concludes that venture capital is crucial for financing structural change, new firms and innovations and therefore possibly also, at present, for employment growth.