Dynamic effects of regulation and deregulation in goods and labour markets

Commendatore, Pasquale and Kubin, Ingrid (2005) Dynamic effects of regulation and deregulation in goods and labour markets. Working Papers Series "Growth and Employment in Europe: Sustainability and Competitiveness", 49. Inst. für Volkswirtschaftstheorie und -politik, WU Vienna University of Economics and Business, Vienna.

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Abstract

Modern macroeconomic models with a Keynesian flavour usually involve nominal rigidities in wages and goods prices. A typical model is static and combines wage bargaining in the labour markets and monopolistic competition in the goods markets. As central policy implication it follows that deregulating labour and/or goods markets increases equilibrium employment. We reassess the consequences of deregulation in a dynamic model. It still increases employment at the fixed point, which corresponds to the static equilibrium solution. However, deregulation may also lead to stability loss and endogenous fluctuations.

Item Type: Paper
Keywords: Labour and goods markets deregulation / monopolistic competition / business cycles
Classification Codes: JEL E1
Divisions: Departments > Volkswirtschaft
Depositing User: Repository Administrator
Date Deposited: 06 Oct 2005 07:54
Last Modified: 22 Oct 2019 00:41
URI: https://epub.wu.ac.at/id/eprint/496

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