Dynamic Effects of Regulation and Deregulation in Goods and Labour Markets
Pasquale Commendatore () and
Ingrid Kubin ()
Working Papers from Vienna University of Economics and Business Research Group: Growth and Employment in Europe: Sustainability and Competitiveness
Modern macroeconomic models with a Keynesian flavour usually involve nominal rigidities in wages and goods prices. A typical model is static and combines wage bargaining in the labour markets and monopolistic competition in the goods markets. As central policy implication it follows that deregulating labour and/or goods markets increases equilibrium employment. We reassess the consequences of deregulation in a dynamic model. It still increases employment at the fixed point, which corresponds to the static equilibrium solution. However, deregulation may also lead to stability loss and endogenous fluctuations.
Keywords: Labour and goods markets deregulation; monopolistic competition; business cycles (search for similar items in EconPapers)
JEL-codes: E1 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac and nep-reg
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Journal Article: Dynamic effects of regulation and deregulation in goods and labour markets (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:wiw:wiwgee:geewp49
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