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Market Regulations, Prices, and Productivity

Author

Listed:
  • Gilbert Cette

    () (Centre de recherche de la Banque de France - Banque de France)

  • Jimmy Lopez

    () (LEDi - Laboratoire d'Economie de Dijon - UB - Université de Bourgogne - CNRS - Centre National de la Recherche Scientifique, Centre de recherche de la Banque de France - Banque de France)

  • Jacques Mairesse

    () (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE ParisTech - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique, UNU-MERIT - UNU-MERIT - United Nations University - Maastricht University, Centre de recherche de la Banque de France - Banque de France)

Abstract

This study is, to our knowledge, the first attempt to infer the consequences on productivity entailed by anticompetitive regulations in product and labor markets through their impacts on production prices and wages. Results show that changes in production prices and wages at country*industry levels are informative about the creation of rents impeding productivity in different ways and to different extents. A simulation based on OECD regulation indicators suggests that nearly all countries could expect sizeable gains in multifactor productivity from the implementation of large structural reform programs changing anticompetitive regulation practices on product and labor markets.

Suggested Citation

  • Gilbert Cette & Jimmy Lopez & Jacques Mairesse, 2016. "Market Regulations, Prices, and Productivity," Post-Print hal-01344484, HAL.
  • Handle: RePEc:hal:journl:hal-01344484
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01344484
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    References listed on IDEAS

    as
    1. Philippe Aghion & Diego Comin & Peter Howitt & Isabel Tecu, 2016. "When Does Domestic Savings Matter for Economic Growth?," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 64(3), pages 381-407, August.
    2. Kevin J. Fox & Gilbert Cette & Jimmy Lopez & Jacques Mairesse, 2017. "Upstream Product Market Regulations, ICT, R&D and Productivity," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 63, pages 68-89, February.
    3. Halmai Peter & Vasary Viktoria, 2009. "Economic Growth and Convergence in the European Union," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 1, pages 171-188, May.
    4. Renaud Bourlès & Gilbert Cette & Jimmy Lopez & Jacques Mairesse & Giuseppe Nicoletti, 2013. "Do Product Market Regulations In Upstream Sectors Curb Productivity Growth? Panel Data Evidence For OECD Countries," The Review of Economics and Statistics, MIT Press, vol. 95(5), pages 1750-1768, December.
    5. Guglielmo Barone & Federico Cingano, 2011. "Service Regulation and Growth: Evidence from OECD Countries," Economic Journal, Royal Economic Society, vol. 121(555), pages 931-957, September.
    6. Olivier Blanchard & Francesco Giavazzi, 2003. "Macroeconomic Effects of Regulation and Deregulation in Goods and Labor Markets," The Quarterly Journal of Economics, Oxford University Press, vol. 118(3), pages 879-907.
    7. Gilbert Cette & Jimmy Lopez & Jacques Mairesse, 2016. "Product and Labour Market Regulations, Production Prices, Wages and Productivity," Review of Economics and Institutions, Università di Perugia, vol. 7(2).
    8. Askenazy, P. & Cette, G. & Maarek, P., 2012. "Rent building, rent sharing - A panel country-industry empirical analysis," Working papers 369, Banque de France.
    9. Philippe Aghion & Peter Howitt, 2009. "The Economics of Growth," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262012634, March.
    10. -, 2009. "Economic growth in the Caribbean," Sede Subregional de la CEPAL para el Caribe (Estudios e Investigaciones) 38668, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
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    Citations

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    Cited by:

    1. Gilbert Cette & Jimmy Lopez & Jacques Mairesse, 2016. "Labour Market Regulations and Capital Intensity," NBER Working Papers 22603, National Bureau of Economic Research, Inc.
    2. Gilbert Cette & Jimmy Lopez & Jacques Mairesse, 2018. "Rent creation and sharing: new measures and impacts on TFP," Working papers 674, Banque de France.
    3. Balázs Égert, 2017. "The quantification of structural reforms: Extending the framework to emerging market economies," OECD Economics Department Working Papers 1442, OECD Publishing.
    4. Masuch, Klaus & Anderton, Robert & Setzer, Ralph & Benalal, Nicholai, 2018. "Structural policies in the euro area," Occasional Paper Series 210, European Central Bank.
    5. Gilbert Cette & Jimmy Lopez & Jacques Mairesse, 2018. "Employment Protection Legislation Impacts on Capital and Skills Composition," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Études Économiques (INSEE), issue 503-504, pages 109-122.
    6. Elstner, Steffen & Rujin, Svetlana, 2019. "The consequences of U.S. technology changes for productivity in advanced economies," Ruhr Economic Papers 796, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    7. Chantal Kegels & Dirk Verwerft, 2018. "Working Paper 09-18 - Economic impact of professional services reform in Belgium - A DSGE simulation," Working Papers 1809, Federal Planning Bureau, Belgium.
    8. Soares, Ana Cristina, 2019. "Price-cost margin and bargaining power in the European Union," IWH-CompNet Discussion Papers 4/2019, Halle Institute for Economic Research (IWH).
    9. G. Cette & J. Lopez & J. Mairesse, 2016. "Labour market regulations and capital labour substitution," Working papers 604, Banque de France.
    10. Pierluigi, Beatrice & Sondermann, David, 2018. "Macroeconomic imbalances in the euro area: where do we stand?," Occasional Paper Series 211, European Central Bank.
    11. repec:kap:regeco:v:54:y:2018:i:2:d:10.1007_s11149-018-9365-y is not listed on IDEAS
    12. Buiatti, C. & Duarte, J. B. & Saenz, L. F., 2017. "Why is Europe Falling Behind? Structural Transformation and Services' Productivity Differences between Europe and the U.S," Cambridge Working Papers in Economics 1708, Faculty of Economics, University of Cambridge.
    13. repec:bfr:bullbf:2018:220:07 is not listed on IDEAS

    More about this item

    Keywords

    rents; anti-competitive regulations; Productivity; market imperfections;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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