Labour and product market competition in a small open economy – Simulation results using a DGE model of the Finnish economy

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dc.contributor Bank of Finland
dc.contributor.author Kilponen, Juha
dc.contributor.author Ripatti, Antti
dc.date.accessioned 2014-09-29T08:10:12Z
dc.date.available 2015-01-29T08:10:12Z
dc.date.issued 2006
dc.identifier.isbn 952-462-265-3
dc.identifier.issn 1456-6184
dc.identifier.uri https://helda.helsinki.fi/bof/handle/123456789/13533
dc.description.abstract Using the DGE model of the Finnish Economy (the 'Aino' model), we study the response of the economy to reforms in both labour and product markets.The reforms are two-fold.We assume that the wage mark-up, ie the monopoly power of wage-setters is gradually reduced by 5 percentage points.At the same time, the degree of competition is increased, ie price margins are exogenously reduced by 2 percentage points.These reforms imply a very favourable outcome of the economy.Both consumption and employment increases permanently and the reforms are welfare enhancing.Public balances improve giving room for 1.5 percentage point cut in income taxes.Our simulation exercises clearly demonstrate that such reforms may help in financing the future fiscal burden of an ageing population. Key words: competition, dynamic general equilibrium, public finance JEL classification numbers: E60, C68
dc.format.extent 54
dc.language.iso ENG
dc.relation.ispartofseries Bank of Finland Research Discussion Papers
dc.rights https://helda.helsinki.fi/bof/copyright
dc.subject avoin talous
dc.subject Suomi
dc.subject finanssipolitiikka
dc.subject markkinat
dc.subject työmarkkinat
dc.subject kilpailu
dc.subject mallit
dc.subject AINO
dc.subject DGE
dc.title Labour and product market competition in a small open economy – Simulation results using a DGE model of the Finnish economy
dc.type Sarjajulkaisu
dc.identifier.urn URN:NBN:fi:bof-201501291022
dc.series.name Bank of Finland Research Discussion Papers
dc.series.year 2006
dc.series.number 5/2006
dc.series.sortingnumber 0005
dc.date.publication 5.2.2006

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