Deregulation shock in product market and unemployment

Bertinelli, Luisito; Cardi, Olivier; Sen, Partha

doi:10.1016/j.jedc.2012.11.004

Cited by 8 publications

(10 citation statements)

References 40 publications

(28 reference statements)

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“…In what relates to the utility function, we fix the inverse of the intertemporal elasticity of substitution to φ = 1.50, as in Gil et al (2016) and Attanasio and Weber (1993), and the homogeneous subjective discount rate to ρ = 0.02, as in Dinopoulos and Thompson (1999). 18 Regarding the Frisch labor supply elasticity, we follow Bertinelli et al (2013) and set γ = 0.5 and γ = 0.2 to account for a standard and a weak responsive labor force, respectively.…”

Section: Resultsmentioning

confidence: 99%

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How Powerful Are Trade Unions? A Skill-Biased Technological Change Approach

2017

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This paper proposes a new theoretical framework aimed at understanding the link between technological change, skill premium, and employment. We build an endogenous growth model of directed technological change with vertical research and development (R&D) in which low-skilled workers might be organized in a trade union. This union can act as a monopoly seller of labor and decide unilaterally the low-skilled wage, or as a managerial union that bargains wage and employment with the employers' federation, i.e., firms. Our results suggest that (i) the impacts of trade unions on technological-bias and on the level of (un)employment crucially depend on their type and preferences; and (ii) trade unions can actually increase low-skilled wages and employment if they have some bargaining power and are employment-oriented. Furthermore, our framework provides some highlights to explain the relationship between wage dispersion and the deunionization process that occurred in the United Kingdom and the United States during the 1980s.

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Section: Resultsmentioning

confidence: 99%

“…Following Feng (2014) and Bertinelli et al (2013), the individual's utility depends positively on its consumption and negatively on the amount of labor it supplies as follows:…”

Section: Householdsmentioning

confidence: 99%

How Powerful Are Trade Unions? A Skill-Biased Technological Change Approach

2017

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“…Luisito Bertinelli 50 , with Olivier Cardi (University of Paris 2) and Partha Sen (Delhi School of Economics) uses a dynamic general equilibrium model with endogenous mark-ups and labour market frictions to investigate the effects of increased product market competition on equilibrium unemployment. Unlike most macroeconomic models of search, they allow for endogenous participation rates.…”

Section: (Iv) Short-run Macroeconomicsmentioning

confidence: 99%

Stability and cooperative solution in stochastic games

Parilina

Tampieri

2017

Theory Decis

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While the paradigm of utility maximisation has formed the basis of the majority of applications in discrete choice modelling for over 40 years, its core assumptions have been questioned by work in both behavioural economics and mathematical psychology as well as more recently by developments in the RUM-oriented choice modelling community. This paper reviews the basic properties with a view to explaining the historical pre-eminence of utility maximisation and addresses the question of what departures from the paradigm may be necessary or wise in order to accommodate richer behavioural patterns. We find that many, though not all, of the behavioural traits discussed in the literature can be approximated sufficiently closely by a random utility framework, allowing analysts to retain the many advantages that such an approach possesses.

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“…Producer Entry and Exit Prior to entry, final sector firms face a sunk entry cost   in units of intermediate input. 20 Sunk entry costs reflect both a technological constraint (  ) and…”

Section: Final Goods Productionmentioning

confidence: 99%

“…It follows that, after substituting and rearranging, equation (20) can be rewritten in real terms as:…”

Section: The Law Of Motion For Net Foreign Assetsmentioning

confidence: 99%

Market deregulation and optimal monetary policy in a monetary union

Cacciatore

Fiori

Ghironi

2016

Journal of International Economics

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The wave of crises that began in 2008 reheated the debate on market deregulation as a tool to improve economic performance. This paper addresses the consequences of increased flexibility in goods and labor markets for the conduct of monetary policy in a monetary union. We model a two-country monetary union with endogenous product creation, labor market frictions, and price and wage rigidities. Regulation affects producer entry costs, employment protection, and unemployment benefits. We first characterize optimal monetary policy when regulation is high in both countries and show that the Ramsey allocation requires significant departures from price stability both in the long run and over the business cycle. Welfare gains from the Ramsey-optimal policy are sizable. Second, we show that the adjustment to market reform requires expansionary policy to reduce transition costs. Third, deregulation reduces static and dynamic inefficiencies, making price stability more desirable. International synchronization of reforms can eliminate policy tradeoffs generated by asymmetric deregulation.

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Deregulation shock in product market and unemployment

Cited by 8 publications

References 40 publications

How Powerful Are Trade Unions? A Skill-Biased Technological Change Approach

How Powerful Are Trade Unions? A Skill-Biased Technological Change Approach

Stability and cooperative solution in stochastic games

Market deregulation and optimal monetary policy in a monetary union

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