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Effects of product and labor market regulation on macroeconomic outcomes

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  • Zanetti, Francesco

Abstract

This paper develops a New Keynesian model with labor search to investigate the effects of product and labor market regulation on macroeconomic outcomes. Product market regulation is proxied by the firm's price markup, and labor market regulation by the worker's bargaining power over the real wage. The results indicate that an increase in both types of regulation leads to a decline in macroeconomic fluctuations, and increases the importance of technology shocks in explaining movements in labor market tightness and employment.

Suggested Citation

  • Zanetti, Francesco, 2009. "Effects of product and labor market regulation on macroeconomic outcomes," Journal of Macroeconomics, Elsevier, vol. 31(2), pages 320-332, June.
  • Handle: RePEc:eee:jmacro:v:31:y:2009:i:2:p:320-332
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    Cited by:

    1. Gill Hammond, 2012. "State of the art of inflation targeting," Handbooks, Centre for Central Banking Studies, Bank of England, edition 4, number 29.
    2. Masashige Hamano & Francesco Zanetti, 2017. "Endogenous Turnover and Macroeconomic Dynamics," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 26, pages 263-279, October.
    3. Francesco Zanetti, 2014. "Labour Market and Monetary Policy Reforms in the UK: a Structural Interpretation of the Implications," Economics Series Working Papers 702, University of Oxford, Department of Economics.

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