Explaining Unemployment Differences with the WS-PS Model
The WS-PS model is a primary framework for analyzing the origins of differences in structural unemployment and real wage growth across countries. By examining country-specific factors that shift the wage-setting and price-setting curves, the model can explain divergent labor market outcomes, such as the superior performance of Germany compared to Spain. The specific conditions within the model that lead to favorable outcomes involve the relative positions of these two curves.
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Introduction to Macroeconomics Course
Ch.2 Unemployment, wages, and inequality: Supply-side policies and institutions - The Economy 2.0 Macroeconomics @ CORE Econ
The Economy 2.0 Macroeconomics @ CORE Econ
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Figure 1.1: Unemployment and Real Wage Growth in 15 High-Income Countries (2010–2019)
A Model-Based Approach to Understanding Labor Market Outcomes
Modeling the Determinants of Real Wages and Unemployment
Role of Institutions and Policies in Labor Market Outcomes
Explaining Unemployment Differences with the WS-PS Model
Figure 2.29: Long-Term Unemployment in Spain, Germany, and Denmark (1960-2022)
Figure 1.5: Labour Market Statistics for Australia, Germany, Norway, and Spain (Averages 2000–2019)
Shared Economic Framework of Germany and Spain
Figure 1.1: Real Wage Growth vs. Unemployment Rate in Various Countries (2010-2019)
Investigating Institutional and Policy Causes for Labor Market Divergence
Figure 2.27: Unemployment and Real Wage Growth in High-Income Countries (2010–2019)
Learn After
Conditions for Favorable Labor Market Outcomes in the WS-PS Model
Insufficiency of Taxation to Explain Spain's vs. Germany's Labor Market Performance
Shortcomings of the WS-PS Model
Comparative Labor Market Performance
A country enacts new legislation that significantly increases the bargaining power of labor unions, allowing them to negotiate for higher wages at any given level of employment. Within the framework of the wage-setting (WS) and price-setting (PS) model, what is the most likely outcome of this policy change on the country's structural unemployment rate?
Within the wage-setting and price-setting framework, a government policy that leads to a sustained increase in the average markup that firms can charge over their costs will, all else being equal, result in a lower equilibrium rate of unemployment.
Impact of Product Market Competition
Comparative Analysis of Labor Market Institutions
A country's government simultaneously implements two new policies: it reduces the generosity of unemployment benefits and it weakens its antitrust laws, leading to less competition among firms. Within the wage-setting (WS) and price-setting (PS) framework, what is the overall effect of these combined policies on the country's equilibrium rate of unemployment?
Match each economic event to its most likely direct effect within the wage-setting (WS) and price-setting (PS) framework.
An economy simultaneously experiences a decrease in its equilibrium rate of unemployment and an increase in its equilibrium real wage. Within the wage-setting (WS) and price-setting (PS) framework, which of the following events is the most plausible explanation for this specific combination of outcomes?
Policy Evaluation for Reducing Structural Unemployment
Evaluating a Labor Market Analysis
Applying the WS-PS Model to Explain Unemployment Divergence
Long-Standing Unemployment Divergence: Spain vs. Germany and Denmark (Figure 2.29)