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

19 Pages Posted: 24 Oct 2003

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)

There are 2 versions of this paper

Date Written: September 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: 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

Gersbach, Hans, Structural Reforms and the Macroeconomy: The Role of General Equilibrium Effects (September 2003). Available at SSRN: https://ssrn.com/abstract=461622