How do trade and labour market institutions affect employment during a crisis? This column finds that trade openness leads to sharper drops in employment, but also faster recoveries. High severance pay dampens employment contraction and very high unemployment benefits are associated with a stronger contraction. These findings suggest that global employment is set to remain stagnant for 2010 before recovering in 2011.

The recent recession that followed the global crisis has often been compared with the Great Depression. This column argues that an important but neglected lesson from that period is that policymakers should be firmly focused on fostering labour market flexibility and maintaining the employability of those out of work, rather than on short fixes that actually cause unemployment to persist.

How can Europe increase structural growth? This column argues that labour market flexibility is key. As a major barrier to labour movement is rigidity in the housing market, abolishing transfer taxes on residential property could result in gains of up to 0.4% of GDP.

Reviving the Spanish economy will require more that macroeconomic stimulus. This column says a sizeable reallocation of labour, brought about by increased labour market flexibility, is the only responsible course of action.