Employment Subsidies, Unemployment and Monopolistic Competition

Marc Fleurbaey

Working Papers from Paris X - Nanterre, U.F.R. de Sc. Ec. Gest. Maths Infor.

Abstract: This paper studies the impact of employment subsidies in a simple macroeconomic model with imperfect competition and unemployment due to wage rigidity. COmputed with a simple formula that is robust to the specification of imperfect competition and wage rigidity, subsidies can make an economy reach the Walrasian equilibrium. Moreover, theintroduction of employment subsidies can reduce unemployment without harming net real incomes, government budget or inflation.

Keywords: EMPLOYMENT; SUBSIDIES; MONOPOLIES; COMPETITION; UNEMPLOYMENT (search for similar items in EconPapers)
JEL-codes: D6 E24 E6 (search for similar items in EconPapers)
Pages: 46 pages
Date: 1998
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Citations: View citations in EconPapers (9)

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Working Paper: Employment subsidies, unemployment and monopolistic competition (1998)
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Persistent link: https://EconPapers.repec.org/RePEc:fth:pnegmi:9824

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