Product market deregulation and the U.S. employment miracle

Monique Ebell and Christian Haefke ()

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We consider the dynamic relationship between product market entry regulation and equilibrium unemployment. The main theoretical contribution is combining a job matching model with monopolistic competition in the goods market and individual bargaining. We calibrate the model to US data and perform a policy experiment to assess whether the decrease in trend unemployment during the 1980's and 1990's could be attributed to product market deregulation. Under a traditional calibration, our results suggest that a decrease of less than two-tenths of a percentage point of unemployment rates can be attributed to product market deregulation, a surprisingly small amount. Under a small surplus calibration, however, product market deregulation can account for the entire decline in US trend unemployment over the 1980's and 1990's.

Keywords: Product market competition; barriers to entry; wage bargaining (search for similar items in EconPapers)
JEL-codes: E24 J63 L16 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2008-06
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http://eprints.lse.ac.uk/19569/ Open access version. (application/pdf)

Related works:
Working Paper: Product Market Deregulation and the U.S. Employment Miracle (2015)
Journal Article: Product Market Deregulation and the U.S. Employment Miracle (2009)
Working Paper: Product Market Deregulation and the U.S. Employment Miracle (2008)
Working Paper: Product Market Deregulation and the U.S. Employment Miracle (2008)
Working Paper: Product Market Deregulation and the U.S. Employment Miracle (2006)
Working Paper: Product market deregulation and the U.S. employment miracle (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:19569

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