Working Paper: CEPR ID: DP5988
Authors: Sylvester C. W. Eijffinger; Alberto Rossi
Abstract: The paper focuses on labor and product market deregulations, as fundamental elements in the passage from an investment to an innovation-based economy. The approach undertaken is prominently empirical. After a very brief description of the regulatory levels on the two sides of the Atlantic, we take two cornerstone theoretical models: one developed by Robert Gordon (1997), the other developed by Blanchard and Giavazzi (2003) and we observe how well their theoretical predictions are supported by hard data. We conclude with an independent study on the accuracy of the IMD competitiveness index in predicting the overall economic performance of countries close to the technological frontier.
Keywords: employment; growth; IMD competitiveness index; productivity; regulation; unemployment; wages
JEL Codes: D24; E24; J50; L16
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Labor market deregulation (J48) | Lower unemployment levels (J68) |
| Labor market deregulation (J48) | Productivity growth (O49) |
| Product market deregulation (L51) | Employment rates (J68) |
| Unemployment (J64) | Labor productivity (O49) |
| Labor market regulations (J48) | Economic growth (O49) |
| Product market regulations (L50) | Economic growth (O00) |