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Product Market Regulation and the Benefits of Wage Moderation [electronic resource] Estevão, Marcello M..

Author/Creator:
Estevão, Marcello M.
Publication:
Washington, D.C. : International Monetary Fund, 2005.
Format/Description:
Government document
Book
1 online resource (30 p.)
Series:
IMF eLibrary
IMF Working Papers; Working Paper No. 05/191.
IMF Working Papers; Working Paper No. 05/191
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Local subjects:
Benefits. (search)
Compensation. (search)
Effect on employment. (search)
Employment. (search)
Employment effects. (search)
Employment equations. (search)
Employment increase. (search)
Employment protection. (search)
General. (search)
High unemployment. (search)
High unemployment rates. (search)
Labor compensation. (search)
Labor demand. (search)
Labor income. (search)
Labor markets. (search)
Local unemployment. (search)
Low unemployment. (search)
Low unemployment rates. (search)
Policy Coordination. (search)
Policy Designs and Consistency. (search)
Policy Objectives. (search)
Unemployed. (search)
Unemployment. (search)
Unemployment benefits. (search)
Unemployment rate. (search)
Unemployment rates. (search)
Wage. (search)
Wage bargaining. (search)
Wages. (search)
Worker. (search)
Australia. (search)
Belgium. (search)
Canada. (search)
Finland. (search)
France. (search)
Germany. (search)
Greece. (search)
Ireland. (search)
Italy. (search)
Japan. (search)
Netherlands. (search)
Portugal. (search)
Spain. (search)
Switzerland. (search)
United States. (search)
Summary:
Euro-area real wages have decelerated sharply in the last 20 years, but this has not yet translated into visibly lower unemployment or faster growth. Weak output growth after such a cost shock is somewhat puzzling and has led some to question the benefits of wage moderation. By isolating structural from cyclical factors in a panel of industrial countries, I show that structurally slower real wage growth, that is, ""wage moderation,"" does raise output growth and lower unemployment rates. However, I show that the impact on both variables depends crucially on product market regulation: weaker competition and barriers to entry mute the growth effects of structural real wage changes by allowing incumbent firms to appropriate larger rents. In this context, overly regulated product markets in the euro area are undermining the effects of labor market reforms on output and employment.
Notes:
Description based on print version record.
Contributor:
Estevão, Marcello M.
Other format:
Print Version:
ISBN:
1451862105:
9781451862102
ISSN:
1018-5941
Publisher Number:
10.5089/9781451862102.001
Access Restriction:
Restricted for use by site license.