The effects of increased labour market flexibility in the United Kingdom: theory and practice
This paper uses the increase in labour market flexibility in the United Kingdom in recent years to see how well the predictions of a couple of recently developed labour market models can account for data. The two models examined are an 'equilibrium business cycle' model of the labour market and a 'search' model. The models do well in predicting the fall in the level and persistence of the unemployment rate and average hours since about 1985 as well as the step increase in consumption and output that seems to have occured. Conversely, unemployment incidence has fallen and the volatilities of output, consumption, employment and unemployment have all increased in the most recent cycle contrary to the predictions of the models.
|Date of creation:||Feb 2000|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +44 (0)171 601 4030
Fax: +44 (0)171 601 5196
Web page: http://www.bankofengland.co.uk/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gali, Jordi, 1995.
"Real Business Cycles with Involuntary Unemployment,"
95-12, C.V. Starr Center for Applied Economics, New York University.
- Galí, Jordi, 1995. "Real Business Cycles with Involuntary Unemployment," CEPR Discussion Papers 1206, C.E.P.R. Discussion Papers.
- Phil Evans, 1998. "Why has the female unemployment rate fallen so much in Britain?," Bank of England working papers 87, Bank of England.
- Scott, Andrew, 1996.
"The Determinants of UK Business Cycles,"
CEPR Discussion Papers
1409, C.E.P.R. Discussion Papers.
- Robert J. Hodrick & Edward Prescott, 1981.
"Post-War U.S. Business Cycles: An Empirical Investigation,"
451, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Hodrick, Robert J & Prescott, Edward C, 1997. "Postwar U.S. Business Cycles: An Empirical Investigation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 29(1), pages 1-16, February.
- Cho, Jang-Ok & Cooley, Thomas F., 1994.
"Employment and hours over the business cycle,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 18(2), pages 411-432, March.
- Dale T. Mortensen & Christopher A. Pissarides, 1993.
"Job Creation and Job Destruction in the Theory of Unemployment,"
CEP Discussion Papers
dp0110, Centre for Economic Performance, LSE.
- Mortensen, Dale T & Pissarides, Christopher A, 1994. "Job Creation and Job Destruction in the Theory of Unemployment," Review of Economic Studies, Wiley Blackwell, vol. 61(3), pages 397-415, July.
- Abowd, John M & Lemieux, Thomas, 1993.
"The Effects of Product Market Competition on Collective Bargaining Agreements: The Case of Foreign Competition in Canada,"
The Quarterly Journal of Economics,
MIT Press, vol. 108(4), pages 983-1014, November.
- John M. Abowd & Thomas Lemieux, 1991. "The Effects of Product Market Competition on Collective Bargaining Agreements: The Case of Foreign Competition in Canada," NBER Working Papers 3808, National Bureau of Economic Research, Inc.
- George A. Akerlof & Andrew K. Rose & Janet L. Yellen, 1988. "Job Switching and Job Satisfaction in the U.S. Labor Market," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 19(2), pages 495-594.
- Oliver Jean Blanchard & Peter Diamond, 1989. "The Beveridge Curve," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 20(1), pages 1-76.
When requesting a correction, please mention this item's handle: RePEc:boe:boeewp:109. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Publications Team)
If references are entirely missing, you can add them using this form.