Working Paper: CEPR ID: DP4043
Authors: Hans Gersbach
Abstract: We examine the macroeconomic consequences of industry wage-bargaining and product market reforms. We suggest that general equilibrium effects may be important for the evaluation of industry-specific regulations. In particular, we suggest that the European unemployment problem can be traced back partially to insufficient recognition of general equilibrium effects. Moreover, unawareness of general equilibrium effects may be an explanation of why regulations are introduced and why structural reforms are (not) undertaken.
Keywords: awareness of general equilibrium effects; product market reforms; sectoral wage bargaining; unemployment; uneven technological progress
JEL Codes: D58; E24; J50; L50
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| industry wage bargaining (J52) | wage agreements (J52) |
| wage agreements (J52) | unemployment rates (J64) |
| industry wage bargaining (J52) | unemployment rates (J64) |
| product market reforms (E69) | productivity gains (O49) |
| productivity gains (O49) | aggregate employment levels (E24) |
| product market reforms (E69) | aggregate employment levels (E24) |