Publications [#325932] of Pietro F. Peretto

Chapters in Books

1. Peretto, PF, Market Power, Unemployment, and Growth, in Frontiers of Economic Growth and Development, edited by de La Grandville, O; Choi, EK (2012), pp. 493-525, Emerald Group Publishing Limited, ISBN 978-1-78052-396-5 [doi]
   (last updated on 2024/04/24)

   Abstract:
   I present a model where firms and workers set wages above the market-clearing level. Unemployment is thus generated by their exercise of market power. Because both the labor and product markets are imperfectly competitive, market power in the labor market interacts with market power in the product market. This interaction sheds new light on the effects of policy interventions on unemployment and growth. For example, labor market reforms that reduce labor costs reduce unemployment and boost growth because they expand the scale of the economy and generate more competition in the product market.