Effective Labor Regulation and Microeconomic Flexibility

Microeconomic flexibility, by facilitating the process of creative-destruction, is at the core of economic growth in modern market economies. The main reason for why this process is not infinitely fast, is the presence of adjustment costs, some of them technological, other institutional. Chief among the latter is labor market regulation. While few economists would object to such a view, its empirical support is rather weak. In this paper we revisit this hypothesis and find strong evidence for it. We use a new sectoral panel for 60 countries and a methodology suitable for such a panel. We find that job security regulation clearly hampers the creative-destruction process, especially in countries where regulations are likely to be enforced. Moving from the 20th to the 80th percentile in job security, in countries with strong rule of law, cuts the annual speed of adjustment to shocks by a third while shaving off about one percent from annual productivity growth. The same movement has negligible effects in countries with weak rule of law.

Large deviations for clocks of self-similar processes

The Lamperti correspondence gives a prominent role to two random time changes: the exponential functional of a L\'evy process drifting to $\infty$ and its inverse, the clock of the corresponding positive self-similar process. We describe here asymptotical properties of these clocks in large time, extending the results of Yor and Zani

Scaling Function, Spectral Function and Nucleon Momentum Distribution in Nuclei

The link between the scaling function extracted from the analysis of (e,e') cross sections and the spectral function/momentum distribution in nuclei is revisited. Several descriptions of the spectral function based on the independent particle model are employed, together with the inclusion of nucleon correlations, and effects of the energy dependence arising from the width of the hole states are investigated. Although some of these approaches provide rough overall agreement with data, they are not found to be capable of reproducing one of the distinctive features of the experimental scaling function, namely its asymmetry. However, the addition of final-state interactions, incorporated in the present study using either relativistic mean field theory or via a complex optical potential, does lead to asymmetric scaling functions in accordance with data. The present analysis seems to indicate that final-state interactions constitute an essential ingredient and are required to provide a proper description of the experimental scaling function.Comment: 29 pages, 13 figures, accepted for publication in Physical Review

Effective Labor Regulation and Microeconomic Flexibility

Microeconomic flexibility is at the core of economic growth in modern market economies because it facilitates the process of creative-destruction, The main reason why this process is not infinitely fast, is the presence of adjustment costs, some of them technological, others institutional. Chief among the latter is labor market regulation. While few economists object to the hypothesis that labor market regulation hinders the process of creative-destruction, its empirical support is limited. In this paper we revisit this hypothesis, using a new sectoral panel for 60 countries and a methodology suitable for such a panel. We find that job security regulation clearly hampers the creative-destruction process, especially in countries where regulations are likely to be enforced. Moving from the 20th to the 80th percentile in job security, in countries with strong rule of law, cuts the annual speed of adjustment to shocks by a third while shaving off about one percent from annual productivity growth. The same movement has negligible effects in countries with weak rule of law