International Journal of Academic Research and Development

International Journal of Academic Research and Development


International Journal of Academic Research and Development
International Journal of Academic Research and Development
Vol. 2, Issue 6 (2017)

Labour policies in the DMP model: A theoretical analysis


Titaskumar Bandyopadhyay

This paper discusses the results of a number of comparative statics exercises carried out in the context of the Diamond-Mortensen-Pissarides (DMP) matching model by distinguishing two alternative scenarios concerning the outflows from the labour market.The main results show that when the job-destruction rate is sufficiently influenced by the wage, labour market deregulation reduces wages but increases unemployment. This is counterintuitive to the standard result. In addition, endogenous redundancy exacerbates the reactivity of the labour market tightness indicator to productivity shocks.
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How to cite this article:
Titaskumar Bandyopadhyay. Labour policies in the DMP model: A theoretical analysis. International Journal of Academic Research and Development, Volume 2, Issue 6, 2017, Pages 322-325
International Journal of Academic Research and Development International Journal of Academic Research and Development