This book helps explain one of the most intriguing and politically salient puzzles in comparative political economy: why some countries have much higher unemployment rates than others. Contrary to new classical economics the focus is on explaining distribution and equilibrium unemployment, and contrary to neo-corporatist theory the role of monetary policy and rational expectation is integral to the analysis. The book makes two central arguments. The first is that monetary policies affect equilibrium employment whenever wages are set above the firm level. The second argument focuses on the distributive effects of different institutions, and models institutional design as a strategic game between partisan governments and cross-class alliances of unions and employers.

Torben Iversen is Harold Hitchings Burbank Professor of Political Economy at Harvard. His research and teaching interests include comparative political economy, electoral politics, and applied formal theory. He is the author of Capitalism, Democracy, and Welfare (Cambridge UP 2005), Contested Economic Institutions (Cambridge UP 1999), and co-author (with Frances Rosenbluth) of Women, Work, and Power: The Political Economy of Gender Inequality (Yale UP, 2010). He is also the co-editor of Unions, Employers and Central Bankers (Cambridge UP 2000) and has published more than three dozen articles in leading journals and edited volumes. His work has won numerous American Political Science Association prizes including the Victoria Schuck Award, Best Book on European Politics and Society Award, the Luebbert Best Article Award, and the Gabriel Almond Best Dissertation Award. He is a former Guggenheim Fellow and National Fellow at the Hoover Institution. He is currently completing a book-length project with David Soskice on the political representation of economic interests in historical perspective.