This article proposes a dynamic efficiency wages model with imperfect competition on labor and product markets. In this framework, job insecurity generates a perverse effect on workers incentives, which shifts up the real wages schedule and may yield employment losses. Product market regulation...

This paper is a contribution to the debate on policy complementarity in relation to deregulation in the product and labour markets. We develop a model of dynamic efficiency wages and monopolistic competition. Whereas most of the literature points toward the gains associated to an increase in...

Standard economic wisdom generally stresses the benefits of increased competition on the product market. This paper proposes a model of monopolistic competition with an endogenous determination of workers' flows in and out of unemployment, where wages are determined according to an efficiency...