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Imperfect Goods and Labor Markets, Regulation, and Spillover Effects

  • Helge Sanner

(De)regulatory interventions frequently have unintended cross- market effects, which may or may not be desirable. We assess the effects of three policies on aggregate variables, in particular real income, from a theoretical perspective. Our results suggest that instruments acting upon wages have only a weak impact on real income, whereas the distribution of income is affected strongly. In contrast, a policy that enhances product market competition is fostering real income, but also impacts strongly on union wages and the distribution of income.

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Paper provided by Universität Potsdam, Wirtschafts- und Sozialwissenschaftliche Fakultät in its series Volkswirtschaftliche Diskussionsbeiträge with number 56.

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Date of creation: 2003
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Handle: RePEc:pot:vwldis:56
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  1. Boeri, Tito & Nicoletti, Giuseppe & Scarpetta, Stefano, 2000. "Regulation And Labour Market Performance," CEPR Discussion Papers 2420, C.E.P.R. Discussion Papers.
  2. Sébastien Jean & Giuseppe Nicoletti, 2002. "Product Market Regulation and Wage Premia in Europe and North America: An Empirical Investigation," OECD Economics Department Working Papers 318, OECD Publishing.
  3. John Pencavel, 2003. "The Surprising Retreat of Union Britain," NBER Working Papers 9564, National Bureau of Economic Research, Inc.
  4. Blanchard, Olivier J & Giavazzi, Francesco, 2001. "Macroeconomic Effects of Regulation and Deregulation in Goods and Labour Markets," CEPR Discussion Papers 2713, C.E.P.R. Discussion Papers.
  5. Werner Antweiler & Daniel Trefler, 2002. "Increasing Returns and All That: A View from Trade," American Economic Review, American Economic Association, vol. 92(1), pages 93-119, March.
  6. Nickell, Stephen, 1999. "Product markets and labour markets1," Labour Economics, Elsevier, vol. 6(1), pages 1-20, March.
  7. Giuseppe Nicoletti & Andrea Bassanini & Ekkehard Ernst & Sébastien Jean & Paulo Santiago & Paul Swaim, 2001. "Product and Labour Markets Interactions in OECD Countries," OECD Economics Department Working Papers 312, OECD Publishing.
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