We study the contribution of market regulations in the dynamics of the real exchange rate within the European Union. Based on a model proposed by De Gregorio et al. (1994a), we show that both product market regulations in nontradable sectors and employment protection tend to inflate the real...

This paper characterizes the optimal policy within a dynamic search model of the labor market with risk-averse workers. In a fi…rst-best allocation of resources, unemployment benefi…ts should provide perfect insurance against the unemployment risk, layoff taxes are necessary to induce...

We study the contribution of market regulations in the dynamics of the real exchange rate within the European Union. Based on a model proposed by De Gregorio et al. (1994a), we show that both product market regulations in nontradable sectors and employment protection tend to inflate the real...