Roots of the Recent Recoveries: Labor Reforms or Private Sector Forces?

Fitoussi, Jean‐Paul; Jestaz, David; Phelps, Edmund S.; Zoëga, Gylfi

doi:10.1353/eca.2000.0006

Cited by 154 publications

(95 citation statements)

References 27 publications

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“…At the same time, high world interest rates act on the country-level like an external demand shock (Blanchard and Wolfers, 2000). Fitoussi et al (2000) thus argue that monetary policy in continental Europe increased unemployment for most of the 1990s for reasons having to do with EMU, the Maastricht Treaty and the tight-money policies instituted by the Bundesbank to offset expenditure for German unification. After having fallen in disgrace in the 1980s and early 1990s, explanations of unemployment that emphasize demandside factors seem to gain centre-stage again (Ball, 1999;Blanchard, 2005;Solow, 2000).…”

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confidence: 99%

What explains high unemployment among low-skilled workers? Evidence from 21 OECD countries

Oesch

2010

European Journal of Industrial Relations

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In OECD countries, unemployment disproportionately affects low-skilled workers. This article examines four explanations: wage-setting institutions, employment regulation, globalization and monetary policy. The analysis is based on pooled regressions for 21 affluent countries over the period 1991-2006. We find no support for the argument that low-skilled workers' employment prospects are hindered by legal minimum wages or strict employment protection, nor that wage inequality improves low-skilled employment. By contrast, investment in active labour market policies pays off and low real interest rates are associated with significantly less low-skilled unemployment. Hence, low-skilled workers' job prospects seem enhanced by a combination of active labour market programmes with monetary policy that fully exploits the economy's growth potential.

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confidence: 99%

What explains high unemployment among low-skilled workers? Evidence from 21 OECD countries

Oesch

2010

European Journal of Industrial Relations

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“…Subsequent works of the structuralist proponents -see, among others, Phelps andZoega (1998, 2001) and Fitoussi et al (2000) -also included the slowdown of productivity (witnessed since the mid 70s), the share of social expenditures in GDP, the educational composition of the labour force, and asset valuation in the determination of unemployment.…”

Section: The Conventional Wisdommentioning

confidence: 99%

The (Ir)relevance of the Nru for Policy Making: The Case of Denmark

Karanassou

Sala

Salvador

2008

Scottish J Political Eco

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit company supported by Deutsche Post World Net. The center is associated with the University of Bonn and offers a stimulating research environment through its research networks, research support, and visitors and doctoral programs. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. We reconsider the central role of the natural rate of unemployment (NRU) in forming policy decisions. We show that the unemployment rate does not gravitate towards the NRU due to frictional growth, a phenomenon that encapsulates the interplay between lagged adjustment processes and growth in dynamic labour market systems. We choose Denmark as the focal point of our empirical analysis and find that the NRU explains only 33% of the unemployment variation, while frictional growth accounts for the remaining 67%. Therefore, our theoretical and empirical findings raise serious doubts as to whether the NRU should play a key instrumental role in policy making.JEL Classification: E22, E24, J21

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“…Empirical findings seem to be quite controversial (Blanchard and Diamond, 1989;Nickell, Nunziata, Ochell, and Quintini, 2001;Belot and Ours, 2000;Fitoussi, Jestaz, Phelps, and Zoega, 2000). In fact, casual inspection of scatter plots of rough (u, v) data across countries does not show any clear-cut negative relationships.…”

Section: Introductionmentioning

confidence: 99%

Towards an evolutionary interpretation of aggregate labor market regularities

Fagiolo¹,

Dosi²,

Gabriele

2005

Entrepreneurships, the New Economy and Public Policy

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Three well-known aggregate regularities (i.e. Beveridge, Wage, and Okun curves) seem to provide a quite complete picture of the interplay between labor market macro-dynamics and the business cycle. Nevertheless, existing theoretical literature still lacks micro-founded models which are able to account jointly for these three crucial stylized facts. In this paper, we present an agent-based, evolutionary, model trying to formalize from the bottom up individual behaviors and interactions in both product and labor markets. We describe as endogenous processes both vacancy and wage setting, as well as matching and bargaining, demand and price formation. Firms enjoy labor productivity improvements (technological progress) and are selected on the basis of their revealed competitiveness (which is also affected by their hiringand wage-setting behaviors). Simulations show that the model is able robustly to reproduce Beveridge, Wage and Okun curves under quite broad behavioral and institutional settings. Moreover, the system generates endogenously an Okun coefficient greater than one even if individual firms employ production functions exhibiting constant returns to labor. Monte Carlo simulations also indicate that statistically detectable shifts in Okun and Beveridge curves emerge as the result of changes in institutional, behavioral, and technological parameters. Finally, the model generates quite sharp predictions about how system parameters affect aggregate performance (i.e. average GDP growth) and its volatility.

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Roots of the Recent Recoveries: Labor Reforms or Private Sector Forces?

Cited by 154 publications

References 27 publications

What explains high unemployment among low-skilled workers? Evidence from 21 OECD countries

What explains high unemployment among low-skilled workers? Evidence from 21 OECD countries

The (Ir)relevance of the Nru for Policy Making: The Case of Denmark

Towards an evolutionary interpretation of aggregate labor market regularities

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