Does product market competition improve the labour market performance ?
(2008) , 47 pages
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- Abstract
- In this paper, I construct a general equilibrium model in which the labour market exhibits search frictions, whereas Cournot competition is assumed in the goods market. The properties of the long run free-entry equilibrium show that a more competitive product market raises employment, but it has ambiguous effects both on the real wage and on the utility of the employees. Moreover, from a normative viewpoint, the level of employment and the degree of competition may be inefficiently high. Numerical results based on Belgian data are finally performed
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Cardullo, G. (2008). Does product market competition improve the labour market performance ? (ECON Discussion Papers 2008-7). https://hdl.handle.net/2078.5/249696