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VOL. 2, ISSUE 6 (2017)
Labour policies in the DMP model: A theoretical analysis
Authors
Titaskumar Bandyopadhyay
Abstract
This paper discusses the results of a number of comparative statics exercises carried out in the context of the Diamond-Mortensen-Pissarides (DMP) matching model by distinguishing two alternative scenarios concerning the outflows from the labour market.The main results show that when the job-destruction rate is sufficiently influenced by the wage, labour market deregulation reduces wages but increases unemployment. This is counterintuitive to the standard result. In addition, endogenous redundancy exacerbates the reactivity of the labour market tightness indicator to productivity shocks.
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Pages:322-325
How to cite this article:
Titaskumar Bandyopadhyay "Labour policies in the DMP model: A theoretical analysis". International Journal of Academic Research and Development, Vol 2, Issue 6, 2017, Pages 322-325
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