TEAM and Irish Steel: an application of the declining high-wage industries literature

Frank Barry and Joe Durkan

No 199510, Working Papers from School of Economics, University College Dublin

Abstract: Since wage stickiness generates unemployment or intersectoral labour transfer in excess of that associated with a flexible-wage adjustment process, it is frequently argued that declining industries should be subsidised to some extent to replicate the behaviour of undistorted economies. We discuss three arguments against this "traditional" viewpoint, and find that each applies in the cases of Irish Steel and Team Aer Lingus. Intervention, we find, far from alleviating the competitiveness problems that these sectors face, actually worsens them.

Keywords: Declining industries; Protection; TEAM Aer Lingus; Irish steel; Industrial policy--Ireland--Case studies; Wages--Ireland--Case studies; Trade adjustment assistance (search for similar items in EconPapers)
JEL-codes: D61 E24 J51 R13 (search for similar items in EconPapers)
Date: 1995-07
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Persistent link: https://EconPapers.repec.org/RePEc:ucn:wpaper:199510

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