Labor Market Policy Instruments and the Role of Economic Turbulence

Times of high unemployment always inspire debates on the role of labor market policy and its optimal implementation. This paper uses a dynamic model of search unemployment and bilateral wage bargaining to characterize optimal labor market policy in a possibly turbulent environment. A firing externality, generated by the existence of a partial unemployment insurance system, distorts the pre-policy equilibrium along three margins: job creation, job acceptance, and job destruction. Optimal policy is characterized by a payroll tax, a firing tax, and a hiring subsidy. Endogenous job acceptance demands that a firing tax and a hiring subsidy have to be set equal in any case and cannot be used to correct for the possible failure of the Hosios condition. In that case the optimal policy mix has to be extended by either an output or recruitment tax/subsidy. It is further shown that the derived policy mix is robust to the introduction of economic turbulence in form of state-dependent worker transitions between skill classes. This is crucial as widely discussed intergroup redistribution schemes, like in-work benefits targeted at low-skilled workers, are rendered considerably less effective in that case. Instead of redistribution from high- to low-skilled workers or from firing firms to unemployed workers, the paper identifies a scheme involving redistribution from firing to hiring firms to be optimal.Search and matching, employment subsidies, economic turbulence, policy spill-over

A New Class of Particle in 2+1 Dimensions

In two spatial dimensions, spin characterizes how particle states re-phase under changes of frame that leave their momentum and energy invariant. Massless particles can in principle have non-trivial spin in this sense, but all existing field theories only describe the trivial case. This letter presents a field theory for a massless particle with non-trivial physical spin. These particles are the 2+1-dimensional analogues of "continuous-spin" particles in 3+1 dimensions, but here they have only two real degrees of freedom, related by parity. They can be understood as massless generalizations of anyons, but are simpler in key respects.Comment: 4 page

Simplified Models for a First Characterization of New Physics at the LHC

Low-energy SUSY and several other theories that address the hierarchy problem predict pair-production at the LHC of particles with Standard Model quantum numbers that decay to jets, missing energy, and possibly leptons. If an excess of such events is seen in LHC data, a theoretical framework in which to describe it will be essential to constraining the structure of the new physics. We propose a basis of four deliberately simplified models, each specified by only 2-3 masses and 4-5 branching ratios, for use in a first characterization of data. Fits of these simplified models to the data furnish a quantitative presentation of the jet structure, electroweak decays, and heavy-flavor content of the data, independent of detector effects. These fits, together with plots comparing their predictions to distributions in data, can be used as targets for describing the data within any full theoretical model.Comment: 76 pages, 24 figures, 9 table

High Energy Electron Signals from Dark Matter Annihilation in the Sun

In this paper we discuss two mechanisms by which high energy electrons resulting from dark matter annihilations in or near the Sun can arrive at the Earth. Specifically, electrons can escape the sun if DM annihilates into long-lived states, or if dark matter scatters inelastically, which would leave a halo of dark matter outside of the sun. Such a localized source of electrons may affect the spectra observed by experiments with narrower fields of view oriented towards the sun, such as ATIC, differently from those with larger fields of view such as Fermi. We suggest a simple test of these possibilities with existing Fermi data that is more sensitive than limits from final state radiation. If observed, such a signal will constitute an unequivocal signature of dark matter.Comment: 6 pages, 5 figures, 1 table, clarifications added, published versio