Deregulation, Welfare State and Competition in the Goods and Labor Markets

Abstract

The deregulation of the labor markets in every industry appears to be the only means able to reduce the high unemployment rates of the European countries. Expansive macroeconomic policies, like those proposed by the so-called Delors Plan (Commissione delle Comunita Europee [3]), must attain very long periods of sustained GNP growth in order to create new jobs. These performances, as we shall see, are well beyond the possibilities of the European economies, regardless of their current position in the cycle. Other microeconomic instruments, like job retraining programs, have proved to be at least slow in reabsorbing technological unemployment.