Market Reforms at the Zero Lower Bound - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Market Reforms at the Zero Lower Bound write by Matteo Cacciatore. This book was released on 2017-10-03. Market Reforms at the Zero Lower Bound available in PDF, EPUB and Kindle. This paper studies the impact of product and labor market reforms when the economy faces major slack and a binding constraint on monetary policy easing. such as the zero lower bound. To this end, we build a two-country model with endogenous producer entry, labor market frictions, and nominal rigidities. We find that while the effect of market reforms depends on the cyclical conditions under which they are implemented, the zero lower bound itself does not appear to matter. In fact, when carried out in a recession, the impact of reforms is typically stronger when the zero lower bound is binding. The reason is that reforms are inflationary in our structural model (or they have no noticeable deflationary effects). Thus, contrary to the implications of reduced-form modeling of product and labor market reforms as exogenous reductions in price and wage markups, our analysis shows that there is no simple across-the-board relationship between market reforms and the behavior of real marginal costs. This significantly alters the consequences of the zero (or any effective) lower bound on policy rates.
Market Reforms at the Zero Lower Bound
Market Reforms at the Zero Lower Bound - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Market Reforms at the Zero Lower Bound write by Matteo Cacciatore. This book was released on 2017. Market Reforms at the Zero Lower Bound available in PDF, EPUB and Kindle.
Trade Policy and Structural Reforms at the Zero Lower Bound
Trade Policy and Structural Reforms at the Zero Lower Bound - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Trade Policy and Structural Reforms at the Zero Lower Bound write by . This book was released on 2017. Trade Policy and Structural Reforms at the Zero Lower Bound available in PDF, EPUB and Kindle. Calls for market reforms to help improve economic performance have become a mantra in European policy discussions. In the recent years, fears of a new wave of protectionism reopened the debate on the macroeconomic effects of raising tariff and non-tariff barriers. In this policy paper, we evaluate the consequences of such policy options for economies in a liquidity trap - i.e. at times of major slack and binding constraints on monetary policy easing (such as when the zero lower bound on nominal interest rates is binding). First, we analyse the consequences of protectionism through the lens of a benchmark business cycle model. We show that raising trade barriers has contractionary effects both domestically and abroad. Such detrimental effects are larger in a liquidity trap. We conclude that Europe should not engage in protectionism, even in response to an increase in the level of tariffs imposed by a major trading partner (such as the U.S.). We then review recent trends in product and labor market regulation across the European Union members. Using results from the academic literature, we argue that market reforms in Europe are unlikely to induce significant deflationary effects, suggesting that the inability of monetary policy to deliver interest rate cuts might not be a relevant obstacle to reform. While coordinated structural reforms across the EU members would maximise short- and long-term gains, legal considerations of the implementation of reforms across countries pose challenges to the harmonisation process.
Wage-Price Dynamics and Structural Reforms in Japan
Wage-Price Dynamics and Structural Reforms in Japan - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Wage-Price Dynamics and Structural Reforms in Japan write by Davide Porcellacchia. This book was released on 2016-02-10. Wage-Price Dynamics and Structural Reforms in Japan available in PDF, EPUB and Kindle. Structural reforms in the liquidity trap need not be deflationary. This paper develops a simple framework to study the role that key characteristics of Japan’s labor and product markets—labor-market duality and weak corporate governance—play in generating unfavorable wage-price dynamics. The model allows a discussion of whether and in what form structural reforms may contribute to Japan’s short-run goal of reflating the economy. It finds that boosting inflation with structural reforms implies an unusual trade-off with employment, that is an inverted Phillips curve. Simultaneous implementation of labor-market and product-market reforms is most effective in terms of reflating the economy.
Labor and Product Market Reforms and External Imbalances: Evidence from Advanced Economies
Labor and Product Market Reforms and External Imbalances: Evidence from Advanced Economies - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Labor and Product Market Reforms and External Imbalances: Evidence from Advanced Economies write by Mr.Romain A Duval. This book was released on 2021-02-26. Labor and Product Market Reforms and External Imbalances: Evidence from Advanced Economies available in PDF, EPUB and Kindle. We explore the impact of major labor and product market reforms on current account dynamics using a new “narrative” database of major changes in employment protection for regular workers and product market regulation for non-manufacturing industries covering 26 advanced economies over the past four decades. Our main finding is that product market deregulation is associated with a weakening of the current account, while labor market deregulation is associated with an improvement. These effects are transitory and driven by both saving and investment responses. Labor and product market reforms both have a more positive impact on the current account balance when implemented under weak macroeconomic conditions. Our results are broadly consistent with predictions from recent DSGE models with endogenous producer entry and labor market frictions.
