Economic Reform External Shocks And The Labor Market
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Economic Reform External Shocks And The Labor Market
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Author : Alejandra Cox Edwards
language : en
Publisher:
Release Date : 1986
Economic Reform External Shocks And The Labor Market written by Alejandra Cox Edwards and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1986 with Chile categories.
Labor And Product Market Reforms And External Imbalances Evidence From Advanced Economies
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Author : Mr.Romain A Duval
language : en
Publisher: International Monetary Fund
Release Date : 2021-02-26
Labor And Product Market Reforms And External Imbalances Evidence From Advanced Economies written by Mr.Romain A Duval and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021-02-26 with Business & Economics categories.
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.
Structural Reforms And External Rebalancing
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Author : Mr.Alexander Culiuc
language : en
Publisher: International Monetary Fund
Release Date : 2017-08-07
Structural Reforms And External Rebalancing written by Mr.Alexander Culiuc and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-08-07 with Business & Economics categories.
Empirical research on structural reforms has focused primarily on their impact on growth and productivity. Yet an often-invoked rationale for structural reforms is their impact on external adjustment. This paper finds little evidence that structural reforms improve the current account in the short run, but they can increase the responsiveness and resilience of the economy to external shocks. In particular, elasticities of exports with respect to the real effective exchange rate increase with some structural indicators, suggesting that structural reforms facilitate the reallocation of resources to the tradable sector in response to a negative external shock. The paper concludes that structural reforms, while not having an immediate positive impact on the current account balance, can be an important complement to traditional macroeconomic adjustment.
Market Reforms At The Zero Lower Bound
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Author : Matteo Cacciatore
language : en
Publisher: International Monetary Fund
Release Date : 2017-10-03
Market Reforms At The Zero Lower Bound written by Matteo Cacciatore and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-10-03 with Business & Economics categories.
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.
Global Shocks And Their Impacton Low Income Countries
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Author : Hans Weisfeld
language : en
Publisher: International Monetary Fund
Release Date : 2011-02-01
Global Shocks And Their Impacton Low Income Countries written by Hans Weisfeld and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011-02-01 with Business & Economics categories.
This paper investigates the short-run effects of the 2007-09 global financial crisis on growth in (mainly non-fuel exporting) low-income countries (LICs). Four conclusions stand out. First, for many individual LICs, 2009 was not extraordinarily calamitous; however, aggregate LIC output declined sharply because LICs were unusually synchronized. Second, the growth declines are on average well explained by the decline in export demand. Third, if the external environment facing LICs improves as forecast, their growth should rebound sharply. Finally, and contrary to received wisdom, there are few robust relationships between the cross-country growth variation and the policy and structural environment; the main exceptions are reserve coverage and labor-market flexibility.
Structural Reform Packages Sequencing And The Informal Economy
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Author : Zsuzsa Munkacsi
language : en
Publisher: International Monetary Fund
Release Date : 2017-05-26
Structural Reform Packages Sequencing And The Informal Economy written by Zsuzsa Munkacsi and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-05-26 with Business & Economics categories.
This paper explores the macroeconomic impacts of labor and product market deregulation using a small open-economy model with formal and informal markets. We examine both the long-run effects and the transition towards the post-reform equilibrium, while our main focus are reform packages and sequencing. The unofficial sector is a major determinant of the sign, and, in particular, the magnitude of responses. South Africa, an emerging country, is considered when Bayesian estimating the model. Regarding the long run, both labor and product market reforms considerably increase output, although labor market reforms are more successful in decreasing unemployment. Nevertheless, there are short-term costs, for example, a decrease in household consumption, net exports or output, or a decrease in competition. Combining reforms, especially with product market deregulation, are good at reducing short-term costs. Finally, concerning the speed of adjustment, it is usually better to start with a labor market reform.
Who Dares Wins
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Author : Mr.Christian H Ebeke
language : en
Publisher: International Monetary Fund
Release Date : 2017-06-30
Who Dares Wins written by Mr.Christian H Ebeke and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-06-30 with Business & Economics categories.
The paper shows that investors value the adoption of structural reforms by lending at lower cost. The reform-induced reduction of long-term yields is bigger when reforms are initiated in good times and in countries facing high borrowing costs. Importantly, there is no statistical evidence that markets systematically punish countries that launch reforms concomitantly with fiscal stimulus. The paper also finds that the social context matters: structural reforms lead to a short-lived overshooting of yields when followed by strikes or lockouts. Controlling for endogeneity issues does not reject the central finding of the paper. These results are economically plausible and confirmed even after using sovereign credit ratings as an alternative dependent variable. These results have two main implications: (i) on average, labor market reforms lower borrowing costs; and (ii) country-specific circumstances also play a role.
Essays On The Transmission Of Economic Shocks
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Author : Claire H. Hollweg
language : en
Publisher:
Release Date : 2014
Essays On The Transmission Of Economic Shocks written by Claire H. Hollweg and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with Consumption (Economics) categories.
This thesis explores the transmission of economic shocks. Although the thesis is structured as four stand-alone chapters, the common theme throughout is identifying the impact of economic shocks: either idiosyncratic shocks at the household-level, macroeconomic shocks emanating from foreign countries and transmitted through global markets, or countries' own macroeconomic policy changes (for example, structural reforms or trade reforms). Each chapter applies a different empirical methodology, including structural estimation, reduced form instrumental variables estimation, and growth accounting. Finally, each chapter utilizes a different dataset and country sample selection. While one chapter uses a micro dataset from household-level surveys, others use cross-country datasets at the aggregate country level. Both developed and developing countries are considered in the analyses. The thesis begins by exploring the relationship between idiosyncratic income changes and consumption changes of Australian households over the period 2001-2009. A major contribution to the literature is the use of the Household Income and Labor Dynamics of Australia dataset that includes panels on both consumption and income data. For the entire sample of Australian households, nearly full consumption smoothing exists against transitory shocks. Although less consumption smoothing exists against permanent shocks, Australian households still achieve a high degree of consumption smoothing against highly persistent shocks, particularly when compared to households in the United States. Durable purchases, female labor supply, and taxes and transfers are all found to act as consumption-smoothing mechanisms. The thesis then explores the impact of structural reforms on a comprehensive list of macro-level labor-market outcomes, including the unemployment rate, employment levels, average wage index, and labor force participation rates. After documenting the average trends across countries in the labor-market outcomes up to ten years on either side of each country's reform year, fixed-effects ordinary least squares as well as instrumental variables regressions are performed to account for likely endogeneity of structural reforms to labor-market outcomes. Overall the results suggest that structural reforms lead to positive outcomes for labor, particularly for informal workers. Redistributive effects in favor of workers, along the lines of the Stolper-Samuelson effect, may be at work. The thesis then explores the impact of trade liberalization on macroeconomic estimates of productivity using Brazil as a case study. Trade and economic reforms can affect the price of capital goods relative to other tradable and especially non-tradable goods. If the price of capital investments rises more than the price of all goods and services in the economy, mismeasurement of the price of capital caused by the divergence in these relative prices would result in an overestimated capital stock and underestimated TFP. This chapter overcomes this bias by constructing a capital price index using international trade data on capital goods' unit values then adjusts the index to reflect domestic Brazilian prices. A significant recovery between 1992 and 2006 is observed, highlighting the important role of the price deflator in growth accounting. The final chapter of this thesis proposes a methodology to measure the vulnerability of a country through exports to fluctuations in the economic activity of foreign markets. Export vulnerability depends first on the overall level of export exposure, measured as the share of exports to a foreign market in gross domestic product, and second on the sensitivity of exports to fluctuations in foreign gross domestic product. This sensitivity is captured by estimating origin-destination specific elasticities of exports with respect to changes in foreign gross domestic product using a gravity model of trade. Although the results suggest differences in elasticity estimates across regions as well as product categories, the principal source of international heterogeneity in export vulnerability results from differences in export exposure to global markets.
Product Market Deregulation And Growth
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Author : Romain Bouis
language : en
Publisher: International Monetary Fund
Release Date : 2016-09-23
Product Market Deregulation And Growth written by Romain Bouis and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016-09-23 with Business & Economics categories.
The paper investigates the economic effects of major product market reforms in some of the historically most protected non-manufacturing industries. It relies on a unique mapping between new annual data on reform shocks and sector-level outcomes for five network industries (electricity and gas, land transport, air transport, postal services, and telecommunications) in twenty-six countries spanning over three decades. The use of a threedimensional panel and careful instrumentation of reform shocks using external instruments enables us to control for economy-wide macroeconomic shocks and address possible sources of omitted variable bias more broadly. Using a local projection method, we find that major reductions in barriers to entry yield large increases in output and labor productivity over a five-year horizon, concomitant with a relative price decline. By contrast, there is only a weak positive effect on sectoral employment, and investment is essentially unaffected, suggesting that output gains from reform primarily reflect higher total factor productivity. It takes some time for these gains to materialize: effects become statistically significant two to three years after the reform, as prices start dropping, and productivity and output increase significantly. However, there is no evidence of any negative short-term cost from reform, including under weak macroeconomic conditions. These findings provide a clear case for intensifying product market reform efforts in advanced economies at the current juncture of weak growth.
Adjustment Programs And Bank Support
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Author : Vittorio Corbo
language : en
Publisher: World Bank Publications
Release Date : 1991
Adjustment Programs And Bank Support written by Vittorio Corbo and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 1991 with Ajuste economico categories.
Adjustment should begin with policy and institutional reforms to deal with the ultimate causes of any macroeconomic crisis a country is experiencing. Only when progress has been made in reducing inflation and fiscal and balance of payment deficits should other structural reforms begin - of the public sector, trade and competition, the financial sector, and the labor market.