Specificity and the Macroeconomics of Restructuring Book

Series Foreword     xi
Preface     xiii
Introduction     1
Introduction     3
Restructuring and Institutions     3
Specificity: A Common Thread     4
Macroeconomic Implications and Outline     6
References and Suggested Readings     12
The Empirics of Aggregate Restructuring     15
Restructuring and Gross Flows     15
International Evidence on Gross Flows     17
Gross Flows and Productivity     22
Gross Flows and Restructuring over the Business Cycle     26
Institutional Impediments to Restructuring     38
Conclusion     51
References and Suggested Readings     51
The Basics     57
The "Fundamental Transformation"     59
Introduction     59
Basic (Static-Single-Margin) Model     62
Short-Run Macroeconomic Implications     70
The Destruction Margin     76
Conclusion     82
Note     83
References and Suggested Readings     83
Efficient Restructuring     87
Basic (Dynamic) Model of Restructuring     87
An Opportunity Cost View of Recessions:Efficient Search     97
Conclusion     110
Appendix: Numerical Computations     110
Note     112
References and Suggested Readings     112
Inefficient Restructuring     117
Inefficient Restructuring     119
Search Frictions and Bargaining     119
Decoupled Restructuring     122
Covert and Overt Rigidity     124
The Slope of the Beveridge Curve     126
Average Distortions in Restructuring and Unemployment     131
Economic Policy     138
Conclusion     146
Appendix: Numerical Computations     147
Note     148
References and Suggested Readings     149
Financial Market Specificity and Restructuring     153
A Static Model     154
A Dynamic Model     162
Inefficient Restructuring     176
Conclusion     193
Appendix: Parameter Restrictions     194
Appendix: Division of Specific Quasi-Rents     194
Appendix: Exit Profitability Condition (Steady State)     196
Appendix: Distributional Dynamics     196
Appendix: Model Calibration and Simulation Method      198
Appendix: Detailed Iterative Procedure     200
Note     202
References and Suggested Readings     202
Application: Structural Adjustment     207
Appropriability in a Simple Model of Adjustment     208
Gradualism     222
Managed Adjustment     231
Conclusion     235
Appendix: Wage Differentials     235
Appendix: Welfare Calculations     236
Appendix: "Overt" Wage Rigidity     238
Appendix: Adjustment in an Inefficient Economy     238
Appendix: Parameters     240
Note     240
References and Suggested Readings     240
Institutional and Technological Evolution     243
Institutions, Interest Groups, and the Response of Markets and Technology     245
The Politics of Capital and Labor     246
The Response of Technology     253
Conclusion     265
Appendix: Simulation Parameters     266
Note     266
References and Suggested Readings     266
Application: Three Decades of Unemployment in Western Europe     271
The French Experience     275
Appropriability, Putty-Clay Technology, and Factor Substitution      282
Technological Dimensions of Appropriability     289
Conclusion     305
Appendix: Wage Payments     308
Note     308
References and Suggested Readings     308
Conclusion     311
Final Remarks     313
Index     315