How are Product Demand Changes Transmitted to the Labour Market?
Abstract
In traditional Keynesian and neoclassical models, the transmission of product demand changes to the labour market generally involves wage-price sluggishness or counter-cyclical real wage movements. In practice, however, real wages are often acyclical or procyclical, and wages and prices are flexible in the longer run. This paper examines the main channels whereby product demand can affect employment under these conditions. The analysis suggests that the longer-term effectiveness of demand management policies depends significantly on the availability of a limited number of supply-side transmission channels.Download Info
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Bibliographic Info
Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 844.
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Date of creation: Sep 1993
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Handle: RePEc:cpr:ceprdp:844
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Related research
Keywords: Demand Management Policy; Employment; Imperfect Competition; Transmission Mechanisms;Other versions of this item:
- Lindbeck, Assar & Snower, Dennis J, 1994. "How Are Product Demand Changes Transmitted to the Labour Market?," Economic Journal, Royal Economic Society, vol. 104(423), pages 386-98, March.
- E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
- E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
- J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
- J4 - Labor and Demographic Economics - - Particular Labor Markets
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Karanassou, Marika & Snower, Dennis J., 2007.
"Characteristics of Unemployment Dynamics. The Chain Reaction Approach,"
Economics Series
205, Institute for Advanced Studies.
- Karanassou, Marika & Snower, Dennis, 2000. "Characteristics of Unemployment Dynamics: The Chain Reaction Approach," IZA Discussion Papers 127, Institute for the Study of Labor (IZA).
- Adriana Kugler & Giovanni Pica, 2003.
"Effects of employment protection and product market regulations on the Italian labor market,"
Economics Working Papers
722, Department of Economics and Business, Universitat Pompeu Fabra.
- Kugler, Adriana D. & Pica, Giovanni, 2004. "Effects of Employment Protection and Product Market Regulations on the Italian Labour Market," CEPR Discussion Papers 4216, C.E.P.R. Discussion Papers.
- Kugler, Adriana & Pica, Giovanni, 2003. "Effects of Employment Protection and Product Market Regulations on the Italian Labor Market," IZA Discussion Papers 948, Institute for the Study of Labor (IZA).
- Marika Karanassou & Hector Sala, 2009.
"Labour Market Dynamics in Australia: What Drives Unemployment?,"
Working Papers
636, Queen Mary, University of London, School of Economics and Finance.
- Marika Karanassou & Hector Sala, 2010. "Labour Market Dynamics in Australia: What Drives Unemployment?," The Economic Record, The Economic Society of Australia, vol. 86(273), pages 185-209, 06.
- Marika Karanassou & Hector Sala, 2008. "Labour Market Dynamics in Australia: What Drives Unemployment?," Discussion Papers 2008-26, School of Economics, The University of New South Wales.
- Karanassou, Marika & Sala, Hector, 2009. "Labour Market Dynamics in Australia: What Drives Unemployment?," IZA Discussion Papers 3924, Institute for the Study of Labor (IZA).
- Marika Karanassou & Hector Sala & Dennis Snower, 2007.
"Long-Run Inflation-Unemployment Dynamics: The Spanish Phillips Curve and Economic Policy,"
Kiel Working Papers
1326, Kiel Institute for the World Economy.
- Karanassou, Marika & Sala, Hector & Snower, Dennis J., 2008. "Long-run inflation-unemployment dynamics: The Spanish Phillips curve and economic policy," Journal of Policy Modeling, Elsevier, vol. 30(2), pages 279-300.
- Marika Karanassou & Hector Sala & Dennis J. Snower, 2002. "Long-Run Inflation-Unemployment Dynamics: The Spanish Phillips Curve and Economic Policy," Working Papers 477, Queen Mary, University of London, School of Economics and Finance.
- Karanassou, Marika & Sala, Hector & Snower, Dennis J., 2003. "Long-Run Inflation-Unemployment Dynamics: The Spanish Phillips Curve and Economic Policy," CEPR Discussion Papers 3690, C.E.P.R. Discussion Papers.
- Snower, Dennis J. & Karanassou, Marika & Sala, Hector, 2002. "Long-Run Inflation-Unemployment Dynamics: The Spanish Phillips Curve and Economic Policy," IZA Discussion Papers 645, Institute for the Study of Labor (IZA).
- Marika Karanassou & Hector Sala & Dennis J.Snower, 2002. "Long-run Inflation-Unemployment Dynamics: The Spanish Phillips Curve and Economic Policy," Working Papers wpdea0211, Department of Applied Economics at Universitat Autonoma of Barcelona.
- Pablo, Agnese & Hector, Sala, 2008. "Unemployment in Japan: A look at the ‘lost decade’," MPRA Paper 14332, University Library of Munich, Germany.
- Karanassou, Marika & Sala, Hector & Snower, Dennis J., 2003.
"The European Phillips Curve: Does the NAIRU Exist?,"
IZA Discussion Papers
876, Institute for the Study of Labor (IZA).
- Karanassou, Marika & Sala, Hector & Snower, Dennis J., 2003. "The European Phillips Curve: Does the NAIRU Exist?," CEPR Discussion Papers 4102, C.E.P.R. Discussion Papers.
- Pichelmann, Karl & Schuh, Andreas-Ulrich, 1996. "The NAIRU - Concept: A Few Remarks," Economics Series 36, Institute for Advanced Studies.
- Corrado Benassi & Roberto Cellini & Alessandra Chirco, 1999. "Market power under income polarization," Journal of Economics, Springer, vol. 69(3), pages 289-298, October.
- Jakob Madsen & Richard Damania, 2001. "Labour Demand and Wage-induced Innovations: Evidence from the OECD countries," International Review of Applied Economics, Taylor and Francis Journals, vol. 15(3), pages 323-334.
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