Demand- and Supply-Side Policies and Unemployment: Policy Implications of the Insider-Outsider Approach
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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Volume (Year): 92 (1990)
Issue (Month): 2 ()
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