Does product market competition improve the labour market performance ?

Gabriele Cardullo

No 2008007, Discussion Papers (ECON - Département des Sciences Economiques) from Université catholique de Louvain, Département des Sciences Economiques

Abstract: In this paper, I construct a general equilibrium model in which the labour market exhibits search frictions, whereas Cournot competition is assumed in the goods market. The properties of the long run free-entry equiibrium show that a more competitive product market raises employment, but it has ambiguous effects both on the real wage and on the utility of the employees. Moreover, from a normative viewpoint, the level of employment and the degree of competition may be inefficiently high. Numerical results based on Belgian data are finally performed.

Keywords: product market competition; search matching equilibrium; barriers to entry (search for similar items in EconPapers)
JEL-codes: E24 J64 L16 (search for similar items in EconPapers)
Date: 2008-02-01
New Economics Papers: this item is included in nep-bec, nep-com, nep-dge, nep-lab, nep-mac and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvec:2008007

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