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Effects of product and labor market regulation on macroeconomic outcomes

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  • Zanetti, Francesco

Abstract

This paper develops a New Keynesian model with labor search to investigate the effects of product and labor market regulation on macroeconomic outcomes. Product market regulation is proxied by the firm's price markup, and labor market regulation by the worker's bargaining power over the real wage. The results indicate that an increase in both types of regulation leads to a decline in macroeconomic fluctuations, and increases the importance of technology shocks in explaining movements in labor market tightness and employment.

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  • Zanetti, Francesco, 2009. "Effects of product and labor market regulation on macroeconomic outcomes," Journal of Macroeconomics, Elsevier, vol. 31(2), pages 320-332, June.
    • Handle: RePEc:eee:jmacro:v:31:y:2009:i:2:p:320-332
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    Cited by:

    1. Tatsushi Okuday & Tomohiro Tsurugaz & Francesco Zanetti, 2019. "Imperfect Information, Shock Heterogeneity, and Inflation Dynamics," BCAM Working Papers 1906, Birkbeck Centre for Applied Macroeconomics.
    2. Francesco Zanetti & Konstantinos Theodoridis, 2018. "State Dependence in Labor Market Fluctuations: Evidence, Theory, and Policy Implications," Economics Series Working Papers 856, University of Oxford, Department of Economics.
    3. Cacciatore, Matteo & Duval, Romain & Furceri, Davide & Zdzienicka, Aleksandra, 2021. "Fiscal multipliers and job-protection regulation," European Economic Review, Elsevier, vol. 132(C).
    4. Tatsushi Okuda & Tomohiro Tsuruga & Francesco Zanetti, 2021. "Imperfect information, heterogeneous demand shocks, and inflation dynamics," CAMA Working Papers 2021-29, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    5. Masashige Hamano & Francesco Zanetti, 2017. "Endogenous Turnover and Macroeconomic Dynamics," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 26, pages 263-279, October.
    6. Romain Duval & Davide Furceri & Joao Jalles, 2020. "Job protection deregulation in good and bad times," Oxford Economic Papers, Oxford University Press, vol. 72(2), pages 370-390.
    7. Gill Hammond, 2012. "State of the art of inflation targeting," Handbooks, Centre for Central Banking Studies, Bank of England, edition 4, number 29, April.
    8. Dur, Ayşe & Martínez García, Enrique, 2020. "Mind the gap!—A monetarist view of the open-economy Phillips curve," Journal of Economic Dynamics and Control, Elsevier, vol. 117(C).
    9. Francesco Zanetti, 2014. "Labour Market and Monetary Policy Reforms in the UK: a Structural Interpretation of the Implications," Economics Series Working Papers 702, University of Oxford, Department of Economics.

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