Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/72705
Authors: 
Ebell, Monique
Haefke, Christian
Year of Publication: 
2008
Series/Report no.: 
Reihe Ökonomie / Economics Series, Institut für Höhere Studien (IHS) 223
Abstract: 
We consider the dynamic relationship between product market entry regulation and equilibrium unemployment. The main theoretical contribution is combining a job matching model with monopolistic competition in the goods market and individual bargaining. We calibrate the model to US data and perform a policy experiment to assess whether the decrease in trend unemployment during the 1980's and 1990's could be directly attributed to product market deregulation. Under a traditional calibration, our results suggest that a decrease of less than two-tenths of a percentage point of unemployment rates can be attributed to product market deregulation, a surprisingly small amount. Under a small surplus calibration, however, product market deregulation can account for the entire decline in US trend unemployment over the 1980's and 1990's.
Subjects: 
product market competition
barriers to entry
wage bargaining
JEL: 
E24
J63
L16
O00
Document Type: 
Working Paper

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