摘要：This paper investigates empirically the effect of labor market
institutions (LMIs) on business cycle fluctuations. Most
studies, using a cross-country panel approach, have found a
weak effect of LMIs on unemployment and, especially, inflation
dynamics. In this paper, we estimate an interacted panel
VAR for OECD countries, where we allow the dynamics of
inflation, unemployment, and the interest rate to vary with
the characteristics of the labor market. We find that LMIs
have a large and significant effect on both unemployment and
inflation dynamics. Stricter employment protection legislation
and higher union density mute the reaction of unemployment
but increase the response of inflation to external shocks. The
opposite effects are found for the generosity of the unemployment
benefit system and the extent of the tax wedge. Countries
with decentralized wage bargaining manage to absorb shocks
through lower variations in unemployment. Our results imply
that countries with very rigid or very flexible labor markets
can have similar inflation and unemployment dynamics.
