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Demand- and Supply-Side Policies and Unemployment: Policy Implications of the Insider-Outsider Approach

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  • Lindbeck, Assar
  • Snower, Dennis J

Abstract

This paper explores a variety of government policies that can stimulate employment when unemployment is generated through conflicts of interest between insiders and outsiders. It also provides guidelines for identifying polices that may be ineffective. The authors show how supply-side policies can stimulate employment by raising worker productivity or reducing labor costs. Their analysis indicates that when wages and prices are flexible, product demand policies have no significant effect on employment unless these policies simulate labor productivity, the entry of firms, capital utilization, or investment. Copyright 1990 by The editors of the Scandinavian Journal of Economics.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Scandinavian Journal of Economics.

Volume (Year): 92 (1990)
Issue (Month): 2 ()
Pages: 279-305

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Handle: RePEc:bla:scandj:v:92:y:1990:i:2:p:279-305

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Web page: http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1467-9442

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Cited by:
  1. Fung, K. C. & Lin, Chelsea C. & Maechler, Andrea M., 2003. "European Economic Integration and the Effectiveness of Employment Policies," Santa Cruz Department of Economics, Working Paper Series qt0tp8k3c5, Department of Economics, UC Santa Cruz.
  2. Aguiar, Alvaro & Ribeiro, Ana Paula, 2009. "Monetary policy and the transition costs of a labor market reform," Journal of Macroeconomics, Elsevier, Elsevier, vol. 31(4), pages 547-560, December.
  3. Kilponen, Juha, 1999. "Central Bank Independence and Wage Bargaining Structure - Empirical Evidence," Research Discussion Papers 9/1999, Bank of Finland.
  4. Tony Syme, 2000. "Public Policy and Unemployment in Interwar France: An Empirical Approach," Economics Series Working Papers 55, University of Oxford, Department of Economics.
  5. Muysken,Joan & Zwick,Thomas, 1996. "A note on incentive wages with human capital formation," Research Memorandum 012, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  6. Rebecca M. Blank & Richard B. Freeman, 1993. "Evaluating the Connection Between Social Protection and Economic Flexib ility," NBER Working Papers 4338, National Bureau of Economic Research, Inc.
  7. Rebecca M. Blank, 1997. "No Easy Answers: Comparative Labor Market Problems in the United States Versus Europe," Macroeconomics, EconWPA 9711003, EconWPA.

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