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

Gersbach, Hans

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

IZA Discussion Paper No. 833

20 Pages Posted: 16 Aug 2003 Last revised: 9 May 2025

See all articles by Hans Gersbach

Hans Gersbach

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

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Abstract

We examine the macroeconomic consequences of industry wage bargaining and productmarket reforms. We suggest that general equilibrium effects may be important for theevaluation of industry-specific regulations. In particular, we suggest that the Europeanunemployment problem can be traced back partially to insufficient recognition of generalequilibrium effects. Moreover, unawareness of general equilibrium effects may be anexplanation of why regulations are introduced and why structural reforms are (not)undertaken.

Keywords: uneven technological progress, industry wage bargaining, unemployment, structural reforms, general equilibrium effects

JEL Classification: D58, E24, J50, L50, O33

Suggested Citation: Suggested Citation

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