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Product Market Competition, Investment and Employment-Abundant versus Job-Poor Growth: A Real Options Perspective

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Author Info
Yu-Fu Chen ()
Michael Funke ()

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Abstract

The role of product market reforms in achieving the objective of higher employment and growth has recently received much attention amongst academics. The aim of this paper is to analyse some of the channels through which cross-market effects come about and to assess their policy relevance. The analytic strategy of this paper relies upon the stochastic real options modelling approach. In a nutshell, our simulations using numerical methods indicate that comprehensive product market reforms would increase factor demand and growth significantly in the medium and long run.

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Publisher Info
Paper provided by CESifo GmbH in its series CESifo Working Paper Series with number CESifo Working Paper No. 1563.

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Date of creation: 2005
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Handle: RePEc:ces:ceswps:_1563

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Keywords: product market competition regulation real options investment employment

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Find related papers by JEL classification:
C61 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Optimization Techniques; Programming Models; Dynamic Analysis
D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
D92 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Firm Choice and Growth, Investment, or Financing
J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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