Download or read book Macroeconomic Effects of Regulation and Deregulation in Goods and Labor Markets written by Olivier Blanchard and published by . This book was released on 2001 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt: Product and labor market deregulation are fundamentally about reducing and redistributing rents, leading economic players to adjust in turn to this new distribution. Thus, even if deregulation eventually proves beneficial, it comes with strong distribution and dynamic effects. The transition may imply the decline of incumbent firms. Unemployment may increase for a while. Real wages may decrease before recovering, and so on. To study these issues, we build a model based on two central assumptions: Monopolistic competition in the goods market, which determines the size of rents; and bargaining in the labor market, which determines the distribution of rents between workers and firms. We then think of product market regulation as determining both the entry costs faced by firms, and the degree of competition between firms. We think of labor market regulation as determining the bargaining power of workers. Having characterized the effects of labor and product market deregulation, we then use our results to study two specific issues. First, to shed light on macroeconomic evolutions in Europe over the last twenty years, in particular on the behavior of the labor share. Second, to look at political economy interactions between product and labor market deregulation.
Download or read book Macroeconomic Effects of Regulation and Deregulation in Goods and Labor Markets written by Olivier J. Blanchard and published by . This book was released on 2001 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: Rather than decrease firing costs across the board, a number of European countries have allowed firms to hire workers on fixed-duration contracts. At the end of a given duration, these contracts can be terminated at little or no cost. If workers are kept on however, the contracts become subject to regular firing costs. We argue in this paper that the effects of such a partial reform of employment protection may be perverse. The main effect may be high turnover in fixed-duration jobs, leading in turn to higher, not lower, unemployment, And, even if unemployment comes down, workers may actually be worse off, going through many spells of nemployment and fixed duration jobs, before obtaining a regular job. Looking at French data for young workers since the early 1980s, we conclude that the reforms have substantially increased turnover, without a substantial reduction in unemployment duration. If anything, their effect on the welfare of young workers appears to have been negative. Keywords: Labor Market Reform, Temporary Employme.
Download or read book Macroeconomic Effects of Regulation and Deregulation in Goods and Labor Markets written by and published by . This book was released on with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The National Bureau of Economic Research, Inc. (NBER) presents an abstract for the paper entitled "Macroeconomic Effects of Regulation and Deregulation in Goods and Labor Markets," by Olivier Blanchard and Francesco Giavazzi. The paper discusses product and labor market deregulation, which are fundamentally about reducing and redistributing rents. Users may purchase the full text of the paper.
Download or read book Macroeconomic Effects of Regulation and Derulation in Goods and Labour Markets written by Olivier Blanchard and published by . This book was released on 2001 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Dynamic Effects of Regulation and Deregulation in Goods and Labour Markets written by and published by . This book was released on 2005 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: 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. (author's abstract).
Download or read book Labor and Product Market Reforms and External Imbalances Evidence from Advanced Economies written by Mr.Romain A Duval and published by International Monetary Fund. This book was released on 2021-02-26 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: We explore the impact of major labor and product market reforms on current account dynamics using a new “narrative” database of major changes in employment protection for regular workers and product market regulation for non-manufacturing industries covering 26 advanced economies over the past four decades. Our main finding is that product market deregulation is associated with a weakening of the current account, while labor market deregulation is associated with an improvement. These effects are transitory and driven by both saving and investment responses. Labor and product market reforms both have a more positive impact on the current account balance when implemented under weak macroeconomic conditions. Our results are broadly consistent with predictions from recent DSGE models with endogenous producer entry and labor market frictions.
Download or read book Dynamic effects of regulation and deregulation in goods and labour markets written by and published by . This book was released on 2005 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Employment Protection Deregulation and Labor Shares in Advanced Economies written by Gabriele Ciminelli and published by International Monetary Fund. This book was released on 2018-08-16 with total page 72 pages. Available in PDF, EPUB and Kindle. Book excerpt: Labor market deregulation, intended to boost productivity and employment, is one plausible, yet little studied, driver of the decline in labor shares that took place across most advanced economies since the early 1990s. This paper assesses the impact of job protection deregulation in a sample of 26 advanced economies over the period 1970-2015, using a newly constructed dataset of major reforms to employment protection legislation for regular contracts. We apply the local projection method to estimate the dynamic response of the labor share to our reform events at both the country and the country-industry levels. For the latter, we employ a differences-in-differences identification strategy using two identifying assumptions grounded in theory—namely that job protection deregulation should have larger negative effects in industries characterized by (i) a higher “natural” propensity to adjust the workforce, and (ii) a lower elasticity of substitution between capital and labor. We find a statistically significant, economically large and robust negative effect of deregulation on the labor share. In particular, illustrative back-of-the-envelope calculations suggest that job protection deregulation may have contributed about 15 percent to the average labor share decline in advanced economies. Together with existing evidence regarding the macroeconomic gains from job protection and other labor market reforms, our results also point to the need for policymakers to address efficiency-equity trade-offs when designing such reforms.
Download or read book Regulation and Macroeconomic Performance written by Brian L. Goff and published by Springer Science & Business Media. This book was released on 2012-12-06 with total page 152 pages. Available in PDF, EPUB and Kindle. Book excerpt: This project grew out of a recognition that I could fmd no aggregate measure of the amount of regulation beyond crude proxies such as the number of pages in the Federal Register. As I began to address this specific issue. I became much more aware of two things -- the enormity of regulation in the u.s. economy and the relative absence of economic research into the macroeconomic consequences of those regulations. While I would have readily granted the idea that many economist'> knew more about regulation than I did, I would have thought my knowledge of regulation to be at least up to the average economist's. My graduate training in the early to mid 1980s included special attention to the field of "public choice" and related topics, all of which occasionally explored regulatory topics. Moreover. I had at least a passing knowledge of the debates concerning deregulation in the late 1970s and early 1980s. Because of this, my own ignorance of regulation's actual expanse and its aggregate consequences startled me and heightened my interest in expanding empirical research into regulation as a macroeconomic influence. The more I thought about graduate macroeconomics classes and texts, the more that I realized the exclusion of regulation as a macroeconomic topic in spite of its massive scale and far-reaching tentacles.
Download or read book Growth Effects of Regulation and Deregulation in Goods and Labor Markets written by Tapio Palokangas and published by . This book was released on 2001 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Macroeconomic Adjustment with Segmented Labor Markets written by Pierre-Richard Agénor and published by . This book was released on 1994 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper analyzes the macroeconomic effects of fiscal and labor market policies in a small open developing country. The basic framework considers an economy with a large informal production sector and a heterogeneous work force. The labor market is segmented as a result of efficiency considerations and minimum wage laws. The basic model is then extended to account for unemployment benefits, income taxation, and imperfect labor mobility across sectors. Under the assumption of perfect labor mobility, we show that a permanent reduction in government spending on nontraded goods leads in the long run to a depreciation of the real exchange rate, a fall in the market-clearing wage for unskilled labor, an increase in output of traded goods, and a lower stock of net foreign assets. A permanent reduction in the minimum wage for unskilled workers improves competitiveness, and expands the formal sector at the expense of the informal sector. Hence, in a two-sector economy in which the minimum wage is enforced only in the formal sector and wages in one segment of the labor market are competitively determined, efficiency wage considerations do not alter the standard neoclassical presumption. A reduction in unemployment benefits is also shown to have a positive effect on output of tradable goods by lowering both the level of efficiency wages and the employment rent of skilled workers.
Download or read book Essays on the Macroeconomic Effects of Labor Market Rigidities written by Andrea De Michelis and published by . This book was released on 2003 with total page 240 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book What is the Impact of Increased Business Competition written by Sónia Félix and published by International Monetary Fund. This book was released on 2019-12-13 with total page 57 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper studies the macroeconomic effect and underlying firm-level transmission channels of a reduction in business entry costs. We provide novel evidence on the response of firms' entry, exit, and employment decisions. To do so, we use as a natural experiment a reform in Portugal that reduced entry time and costs. Using the staggered implementation of the policy across the Portuguese municipalities, we find that the reform increased local entry and employment by, respectively, 25% and 4.8% per year in its first four years of implementation. Moreover, around 60% of the increase in employment came from incumbent firms expanding their size, with most of the rise occurring among the most productive firms. Standard models of firm dynamics, which assume a constant elasticity of substitution, are inconsistent with the expansionary and heterogeneous response across incumbent firms. We show that in a model with heterogeneous firms and variable markups the most productive firms face a lower demand elasticity and expand their employment in response to increased entry.
Download or read book Macroeconomic Effects of Active Labor Market Policies written by Tanja Zehnder and published by . This book was released on 2008 with total page 130 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Employment Effects of Labor and Product Markets Deregulation and Their Implications for Structural Reform written by Helge Berger and published by . This book was released on 2006 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study explores the effects of labor and product market deregulation on employment growth. Our empirical results, based on an OECD country panel from 1990-2004, suggest that lower levels of product and labor market regulation foster employment growth, including through sizable interaction effects. Based on these findings, the paper develops a theoretical framework for evaluating deregulation strategies in the presence of reform costs. Optimal deregulation takes various forms depending on the deregulation costs and the strength of reform interactions. Compared to the first best, decentralized decision-making based on a partial market-by-market perspective can lead to excessive or insufficient regulation, depending on the design of the decision process. Securing the first best requires not only coordinating deregulation activities across sectors but also overcoming the partial perspective of decision makers.
Download or read book The World Bank Research Observer written by and published by . This book was released on 2003 with total page 300 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Law and Employment written by James J. Heckman and published by University of Chicago Press. This book was released on 2007-11-01 with total page 585 pages. Available in PDF, EPUB and Kindle. Book excerpt: Law and Employment analyzes the effects of regulation and deregulation on Latin American labor markets and presents empirically grounded studies of the costs of regulation. Numerous labor regulations that were introduced or reformed in Latin America in the past thirty years have had important economic consequences. Nobel Prize-winning economist James J. Heckman and Carmen Pagés document the behavior of firms attempting to stay in business and be competitive while facing the high costs of complying with these labor laws. They challenge the prevailing view that labor market regulations affect only the distribution of labor incomes and have little or no impact on efficiency or the performance of labor markets. Using new micro-evidence, this volume shows that labor regulations reduce labor market turnover rates and flexibility, promote inequality, and discriminate against marginal workers. Along with in-depth studies of Colombia, Peru, Brazil, Argentina, Chile, Uruguay, Jamaica, and Trinidad, Law and Employment provides comparative analysis of Latin American economies against a range of European countries and the United States. The book breaks new ground by quantifying not only the cost of regulation in Latin America, the Caribbean, and in the OECD, but also the broader impact of this regulation.
