That is something merchants already knew back in the Middle Ages, when they ﬂocked to Frankfurt’s trade fair to trade in goods. Indeed, they came equipped with a variety of different coins. But what rates were they supposed to exchange their coins at? This question led a group of merchants, in 1585, to ask the city to set the rates.
Job protection regulations that affect a firm’s flexibility to recruit and dismiss workers can interfere with this process, making it difficult both for newcomers to find jobs and for firms to adopt new technologies. The inability to adjust hours flexibly through the use of overtime, part-time and temporary work may also stifle innovation.