search query: @indexterm adjustment costs / total: 31
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| Author: | Karp, L. Paul, T. |
| Title: | Labor adjustment and gradual reform: when is commitment important? |
| Journal: | Journal of International Economics
1998 : DEC, VOL. 46:2, p. 333-362 |
| Index terms: | LABOUR ADJUSTMENT COSTS COMMITMENT |
| Language: | eng |
| Abstract: | The authors analyze a model in which a government uses a second best policy to affect the reallocation of labour, following a change in relative prices. The authors consider two extreme cases, in which the government has either unlimited or negligible ability to commit to future actions. The authors discuss the factors that determine the importance of commitment ability and provide numerical examples. The degree of commitment ability can alter the equilibrium policy both quantitatively and qualitatively. |
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