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

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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.

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Abstract

The paper analyzes a variety of government policies that can stimulate employment when unemployment is generated through the conflicting of interest between insiders and outsiders. It also provides guidelines for identifying policies that may be ineffective. We show how supply side policies can stimulate employment by raising worker productivity or reducing labor costs. Our analysis indicates that when wages and prices are flexible, product demand policies have no significant effect on employment unless these policies stimulate labor productivity, the entry of firms, capital utilization or investment.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 329.

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Date of creation: Aug 1989
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Handle: RePEc:cpr:ceprdp:329

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Article
- Lindbeck, Assar & Snower, Dennis J, 1990. " Demand- and Supply-Side Policies and Unemployment: Policy Implications of the Insider-Outsider Approach," Scandinavian Journal of Economics, Blackwell Publishing, vol. 92(2), pages 279-305.
Paper
- Lindbeck, A. & Snower, D.J., 1989. "Demand- And Supply-Side Policies And Unemployment: Policy Implications Of The Insider-Outside Approach," Papers 439, Stockholm - International Economic Studies.

Cited by:
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Tony Syme, 2000. "Public Policy and Unemployment in Interwar France: An Empirical Approach," Economics Series Working Papers 055, University of Oxford, Department of Economics. [Downloadable!]
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. [Downloadable!] (restricted)
Other versions:
- Rebecca M. Blank & Richard B. Freeman, 1994. "Evaluating the Connection between Social Protection and Economic Flexibility," NBER Chapters, in: Social Protection versus Economic Flexibility: Is There a Trade-Off?, pages 21-42 National Bureau of Economic Research, Inc. [Downloadable!]
Rebecca M. Blank, . "Is There a Trade-off between Unemployment and Inequality? No Easy Answers: Labor Market Problems in the United States versus Europe," Economics Public Policy Brief Archive 33, Levy Economics Institute, The. [Downloadable!]
Rebecca M. Blank, 1997. "No Easy Answers: Comparative Labor Market Problems in the United States Versus Europe," Macroeconomics 9711003, EconWPA. [Downloadable!]
Muysken,Joan & Zwick,Thomas, 1996. "Insider power breeds human capitalists," Research Memoranda 017, Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization. [Downloadable!]
Kilponen, Juha, 1999. "Central Bank Independence and Wage Bargaining Structure - Empirical Evidence," Research Discussion Papers 9/1999, Bank of Finland. [Downloadable!]
Other versions:
- Kilponen, J., 1999. "Central Bank Independence and Wage Bargaining Structure - Empirical Evidence," Bank of Finland - Studies in Economics and Finance 9/99, Bank of Finland. Research Department..
Muysken,Joan & Zwick,Thomas, 1996. "A note on incentive wages with human capital formation," Research Memoranda 012, Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization. [Downloadable!]
Emanuela Ghignoni, 2006. "Human capital, unemployment, and probability of transition to permanent employment in the Italian regional labour markets," Working Papers 93, Sapienza University of Rome, Department of Public Economics. [Downloadable!]

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