Structural Reforms and the Macroeconomy: The Role of General Equilibrium Effects

Gersbach, Hans

Structural Reforms and the Macroeconomy: The Role of General Equilibrium Effects

20 Pages Posted: 16 Aug 2003

Hans Gersbach

ETH Zurich - CER-ETH -Center of Economic Reseaarch; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR)

There are 2 versions of this paper

Date Written: July 2003

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: industry wage bargaining, structural reforms, general equilibrium effects

JEL Classification: D58, E24, J60, L13

Suggested Citation: Suggested Citation

Gersbach, Hans, Structural Reforms and the Macroeconomy: The Role of General Equilibrium Effects (July 2003). IZA Discussion Paper No. 833. Available at SSRN: https://ssrn.com/abstract=434920