Dynamic effects of regulation and deregulation in goods and labour markets

Pasquale Commendatore, Ingrid Kubin

Publikation: Working/Discussion PaperWU Working Paper

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.
OriginalspracheEnglisch
ErscheinungsortVienna
HerausgeberInst. für Volkswirtschaftstheorie und -politik, WU Vienna University of Economics and Business
PublikationsstatusVeröffentlicht - 2005

Publikationsreihe

NameWorking Papers Series "Growth and Employment in Europe: Sustainability and Competitiveness"
Nr.49

WU Working Paper Reihe

  • Working Papers Series \ Growth and Employment in Europe Sustainability and Competitiveness

Dieses zitieren