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Several economic models predict that effort may decline as retirement approaches. These models are reviewed and data from the University of Iceland used to measure how research productivity of members of staff depends on age. We find support for the hypothesis that men are at a greater risk of becoming inactive when they approach retirement. Moreover, men tend to be more research active than women in their thirties and forties but lose their edge in their fifties and sixties. Finally, we detect a cohort effect such that later cohorts are more productive than earlier ones.

Differences in productivity account for differences in output per capita between countries as well as changes in output and the standard of living for each country over long periods of time. During the first industrial revolution, one could already see the emergence of two groups of countries: the high- and the low-GDP per capita countries. The list of countries belonging to the highproductivity group has not changed much over the past century. Differences in institutions separate the two clubs. The high-productivity group is, amongst many other differences, characterized by less corruption, a better legal system, superior enforcement of contracts, a lower cost of starting a business and lower tariffs. Historical output series for Britain going back to the mid-19th century show that productivity has increased greatly and improved the standard of living.

This paper introduces public consumption—hence the size of the public sector—into an efficiency wage model of the labour market. The effect of a simultaneous rise in taxes and public consumption on unemployment is derived. There arises an unambiguous positive relationship between the size of the public sector and equilibrium unemployment if public and private consumption are substitutes and wages are taxed. The impact of taxes on consumption on unemployment, although in general not equal to zero, is ambiguous.

We analyse the voting pattern in the June 23rdreferendum on the continued participation of the United Kingdom in the European Union and evaluate the reasons for the results. We find that output, education and the share of older people at the regional level can explain attitudes towards immigrants and the European Union. Thus, regions where GDP per capita is low, a high proportion of people has low education, a high proportion is over the age of 65 and there is strong net immigration are more likely to be apprehensive of the European Union, be suspicious of immigrants and not want them as neighbours and, most importantly, to vote for Brexit. The fear of immigration does not seem to be fully justified in terms of the literature on the labour market effects of immigrants in the UK. Using the British Election Study we find similar results. Thus negative attitudes towards immigration and EU enlargement are correlated with voting for Brexit using data on individuals.

Unsustainable accumulation of debt precedes financial crises. The recent Western financial crisis was no exception in this regard. The external debt of Greece, Iceland, Ireland, and Spain increased exponentially, in Iceland at a rate higher than the rate of interest on foreign debt. The Ponzi scheme that played out in Iceland begs the question why a country would set out on a path that could lead to a financial crisis. We address this question and describe the private incentives faced by bankers, financiers, politicians and others. In particular, we show how private incentives and a culture that valued financial gains above all else collided with socially desirable outcomes. The root of the problem in Iceland as well as in other crisis countries was a failure at the state level to align private incentives with what was socially prudent, a failure due, at least in Iceland, to a combination of mistakes, incompetence and what can only be called corruption. Furthermore, misplaced belief in a market economy where morals and ethics play no role paved the way to serious lapses in accounting and in the operation of the banks.

We study a sample of individuals in 20 European countries that includes eight East European countries in order to identify whether these eight countries differ from the Western countries in the popularity of right-wing populist parties once we have controlled for personal attributes. The results show variation among the East European countries so that they are not distinct from Western Europe. In particular, in Hungary and Poland populist right-wing parties enjoy greater support once account is taken of the variables above. Moreover, we find that a right-wing identity, a negative view of immigrants, not being satisfied with democracy, being negative on homosexuality, and mistrust in both the national and the European parliament seem to be the factors heavily correlated with voting for a right-wing populist party in Europe. Also, men are more likely to vote for a right-wing populist party as are the old and the less educated. Having experienced unemployed also increased the probability of voting for these parties.