Discussion Paper Details

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Title: Labor policies and capital mobility in theory and in EMU

Author(s): Giuseppe Bertola

Publication Date: August 2014

Keyword(s): policy competition and public choice

Programme Area(s): International Macroeconomics and Labour Economics

Abstract: "Race-to-the-bottom" deregulation is to be expected when markets operate across the borders of countries that independently choose and enforce labor policies. Less obviously, in pre-crisis EMU reforms of labor market policies were uneven and related to international imbalances. That pattern is readily explained by this paper's model of financial integration between differently capital-abundant countries, within which labor policies benefit individuals with wealth/labor income ratios different from country's aggregate.

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Bibliographic Reference

Bertola, G. 2014. 'Labor policies and capital mobility in theory and in EMU'. London, Centre for Economic Policy Research.