Market Deregulation and Optimal Monetary Policy in a Monetary Union
Bibliographic record
Abstract
The wave of crises that began in 2008 reheated the debate on market deregulation as a tool to improve economic performance.This paper addresses the consequences of increased flexibility in goods and labor markets for the conduct of monetary policy in a monetary union.We model a two-country monetary union with endogenous product creation, labor market frictions, and price and wage rigidities.Regulation affects producer entry costs, employment protection, and unemployment benefits.We first characterize optimal monetary policy when regulation is high in both countries and show that the Ramsey allocation requires significant departures from price stability both in the long run and over the business cycle.Welfare gains from the Ramsey-optimal policy are sizable.Second, we show that the adjustment to market reform requires expansionary policy to reduce transition costs.Third, deregulation reduces static and dynamic inefficiencies, making price stability more desirable.International synchronization of reforms can eliminate policy tradeoffs generated by asymmetric deregulation.
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How this classification was reachedexpand
Full frame machine prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.
Distilled classifier scores by category (both heads)
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.003 | 0.007 |
| Meta-epidemiology (narrow) | 0.000 | 0.001 |
| Meta-epidemiology (broad) | 0.001 | 0.001 |
| Bibliometrics | 0.000 | 0.000 |
| Science and technology studies | 0.001 | 0.003 |
| Scholarly communication | 0.004 | 0.004 |
| Open science | 0.001 | 0.001 |
| Research integrity | 0.002 | 0.002 |
| Insufficient payload (model declined to judge) | 0.004 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".