Labour Market and Monetary Policy Reforms in the UK: a Structural Interpretation of the Implications

Francesco Zanetti

No 702, Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: This paper estimatesa New Keynesian model to investigate to what extent labour market reforms undertaken by the Thatcher government in the late 1930s and the introduction of a constant inflation target in 1992 might have changed the UK economic outlook if they had been introduced in the early 1970s. The results suggest that a stronger reaction to deviations of inflation from target have contributed to a more stable economic outlook, while labour market reforms and the introduction of a constant inflation target are unlikely to have produced a different outcome.

Keywords: Labour market reforms; Search and matching; New Keynesian model (search for similar items in EconPapers)
JEL-codes: E24 E32 E52 J64 (search for similar items in EconPapers)
Date: 2014-04-30
New Economics Papers: this item is included in nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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