Citation

Discussion Paper Details

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Full Details

Title: Demand- and Supply-Side Policies and Unemployment: Policy Implications of the Insider-Outsider Approach

Author(s): Assar Lindbeck and Dennis J. Snower

Publication Date: August 1989

Keyword(s): Employment, Government Policy, Labour Productivity, Unions and Wages

Programme Area(s): Applied Macroeconomics

Abstract: The paper analyzes a variety of government policies that can stimulate employment when unemployment is generated through the conflicting of interest between insiders and outsiders. It also provides guidelines for identifying policies that may be ineffective. We show how supply side policies can stimulate employment by raising worker productivity or reducing labor costs. Our analysis indicates that when wages and prices are flexible, product demand policies have no significant effect on employment unless these policies stimulate labor productivity, the entry of firms, capital utilization or investment.

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Bibliographic Reference

Lindbeck, A and Snower, D. 1989. 'Demand- and Supply-Side Policies and Unemployment: Policy Implications of the Insider-Outsider Approach'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=329