Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/104902 
Year of Publication: 
1997
Series/Report no.: 
Tübinger Diskussionsbeiträge No. 112
Publisher: 
Eberhard Karls Universität Tübingen, Wirtschaftswissenschaftliche Fakultät, Tübingen
Abstract: 
This paper considers the sensitivity of policy simulation to the specification of the labour market in an Applied General Equilibrium (AGE) model of the European Union. We consider a variety of adjustments to the labour market, including the introduction of labour supply heterogeneity and involuntary unemployment, and examine how those adjustments influenae the simulated impact of a move to European VAT harmonisation. Empirical results indicate that the precise mechanism by which unemployment is factored into the AGE model has important consequences for the price, quantity and welfare effects following the policy reform.
Document Type: 
Working Paper

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