Structural Reforms and the Macroeconomy: The Role of General Equilibrium Effects
19 Pages Posted: 24 Oct 2003
Date Written: September 2003
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, unemployment, uneven technological progress, product market reforms, sectoral wage bargaining
JEL Classification: D58, E24, J50, L50
Suggested Citation: Suggested Citation