thereby for equilibrium unemployment in an economy with product and labour market imperfections.We show that intensified … product market competition will reduce equilibrium unemployment, whereas the effect of increased capital intensity is more … complex.Higher capital intensity will decrease the equilibrium unemployment when the elasticity of substitution between …

unemployment.We then discuss and research the role of labour market institutions in the adjustment process that has brought … unemployment back to a " normal " level.We argue that these institutions cannot be blamed for the increase in unemployment, but … that more flexible institutions could have led to a more rapid fall in unemployment once the Finnish economy began to …