External Imbalances and the Wage Curve: The Role of Labour and Product Market Regulation.

TY - BOOK

T1 - External Imbalances and the Wage Curve

T2 - The Role of Labour and Product Market Regulation.

AU - Santos Monteiro, Paulo

PY - 2017/7

Y1 - 2017/7

N2 - This paper proposes a method to identify how labour market institutions and product market regulation interact with economic shocks, and affect unemployment and wage dynamics during periods of external imbalances corrections. This is done using a general equilibrium model of trade, external imbalances and unemployment that incorporates labour market frictions via a structural wage equation, and implies equilibrium cross-sectional dispersion of unemployment rates. We apply the method to study the role of macroeconomic shocks, labour market institutions and product market regulation in the correction of external imbalances in the European Monetary Union (EMU) over the last decade, and the concurrent heterogeneous unemployment dynamics.

AB - This paper proposes a method to identify how labour market institutions and product market regulation interact with economic shocks, and affect unemployment and wage dynamics during periods of external imbalances corrections. This is done using a general equilibrium model of trade, external imbalances and unemployment that incorporates labour market frictions via a structural wage equation, and implies equilibrium cross-sectional dispersion of unemployment rates. We apply the method to study the role of macroeconomic shocks, labour market institutions and product market regulation in the correction of external imbalances in the European Monetary Union (EMU) over the last decade, and the concurrent heterogeneous unemployment dynamics.

U2 - 10.2765/303722

DO - 10.2765/303722

M3 - Commissioned report

BT - External Imbalances and the Wage Curve

ER -