Labor adjustment and gradual reform: when is commitment important?

• 成果类型: Article
• 署名作者: Karp, L; Paul, T
• 署名单位: University of California System; University of California Berkeley; Communaute Universite Grenoble Alpes; Universite Grenoble Alpes (UGA)
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/S0022-1996(97)00055-X
• 发表日期: 1998
• 页码: 333-362
• 关键词: adjustment costs; dynamic tariffs; time inconsistency; Markov perfection

摘要

We analyze a model in which a government uses a second best policy to affect the reallocation of labor, following a change in relative prices. We consider two extreme cases, in which the government has either unlimited or negligible ability to commit to future actions. We discuss the factors that determine the importance of commitment ability and provide numerical examples. The degree of commitment ability can alter the equilibrium policy both quantitatively and qualitatively. In both extreme cases the dying sector is protected during the transition to a free market, in order to decrease the amount of unemployment. (C) 1998 Elsevier Science B.V. All rights reserved.