We estimate the quantitative importance of labour market institutions for equilibrium unemployment in OECD. The empirical equation for unemployment is based on the solution of a dynamic macroeconomic model where wages and prices are jointly determined with unemployment. Compared to existing...

We focus on the equilibrium unemployment rate as a parameter implied by a dynamic aggregate model of wage- and price setting. The equilibrium unemployment rate depends on institutional labour market institutions through mark-up coefficients. Compared to existing studies, the resulting final...