Finnish unemployment: observations and conjectures
AbstractIn this study we analyze the factors behind the Finnish unemployment shock of the 1990s. The analysis is based on labour demand, wage-setting and current account equations that form a structural labour market model. The results of this model are compared to those obtained from a reduced form unemployment equation. We find that the both approaches yield relatively similar results. The main factor causing the dramatic increase in Finnish unemployment in the early 1990s seem to have been the real interest rate shocks of the years 1989–92. In addition to interest rates, there are other explaining variables although they are of minor importance. They include domestic supply side factors such as increased tax wedge and replacement ratio, and variables related to the economy’s external constraint. These are the terms of trade and the economy’s foreign indebtedness.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Finnish Economic Association in its journal Finnish Economic Papers.
Volume (Year): 12 (1999)
Issue (Month): 2 (Autumn)
Find related papers by JEL classification:
- J60 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - General
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Seppo Honkapohja & Erkki Koskela & Jouko Paunio, 1996. "The depression of the 1990s in Finland : an analytic view," Finnish Economic Papers, Finnish Economic Association, vol. 9(1), pages 37-54, Spring.
- Jennifer Hunt, 1999.
"Has Work-Sharing Worked In Germany?,"
The Quarterly Journal of Economics,
MIT Press, vol. 114(1), pages 117-148, February.
- Petri Böckerman & Markus Jäntti, 2005. "Is Variation in Hours of Work Driven by Supply or Demand? Evidence from Finnish Manufacturing Industries," Labor and Demography 0505012, EconWPA.
- Karanassou, Marika & Sala, Hector & Salvador, Pablo F., 2007.
"Capital Accumulation and Unemployment: New Insights on the Nordic Experience,"
IZA Discussion Papers
3066, Institute for the Study of Labor (IZA).
- Marika Karanassou & Hector Sala & Pablo F. Salvador, 2008. "Capital accumulation and unemployment: new insights on the Nordic experience," Cambridge Journal of Economics, Oxford University Press, vol. 32(6), pages 977-1001, November.
- Marika Karanassou & Hector Sala & Pablo F. Salvador, 2007. "Capital Accumulation and Unemployment: New Insights on the Nordic Experience," Working Papers 611, Queen Mary, University of London, School of Economics and Finance.
- Erkki Koskela & Roope Uusitalo, 2003. "The Un-Intended Convergence: How the Finnish Unemployment Reached the European Level," CESifo Working Paper Series 878, CESifo Group Munich.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Editorial Secretary).
If references are entirely missing, you can add them using this form.