Unemployment: Key Studies

Question 1

Nickel et al (2005)

Answer 1

Differences in NAIRU and employment levels in between countries can be explained by “shifts in labour market institutions”

Question 2

Blanchard

Answer 2

“battle of mark ups”

Question 3

Solow (2000)

Answer 3

US greater wage differentiation, greater inequality.

EPL higher in Europe.

Greater union density and power in Europe.

Question 4

Lindert (2014)

Answer 4

“Welfare and unemployment compensation do not offer young adjust a full life of pay”

Question 5

OCED (2008)

Answer 5

Strictness of EPL Index
US: 0.9
UK: 1.1
Greece: 3.0

Question 6

OECD (2016)

Answer 6

EPL has a negative impact

Baker (2005) refutes

Question 7

Ball (1999)

Answer 7

Improvements in unemployment are due to macroeconomic conditions rather than changes labour market institutions

Question 8

OECD (2017)

Answer 8

After GFC:
Hysteresis negatively effects output

Lower impact on unemployment

EPL prolonged unemployment

Expansionary fiscal policy decreases unemployment

Question 9

Krugerman

Answer 9

“growth is weak, full stop, period, end of story”

Question 10

Ball Okuns Law

Answer 10

Supports

Still a puzzle between elasticities and labour market institutions across countries.