Article

De Economist

, Volume 133, Issue 4, pp 484-526

First online:

A model of the Dutch labour market (AMO-K)

  • J. A. M. Heijke
  • , J. De Koning
  • , R. J. M. MaasAffiliated withNational Institute for Public Health and Environment (RIVM)
  • , G. Den BroederAffiliated withNetherlands Economic Institute (NEI)

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Summary

So far, the labour market has not received any special attention from macro-econometric model builders. In this article an attempt has been made to describe the labour market in detail, paying attention to such important phenomena as the friction between labour supply and demand, the heterogeneity of labour, the dependence of labour supply on the labour-market situation, the Phillips mechanism and the impact of real wages on labour demand. To make it suitable for policy simulations, the model has been extended to a complete macro-econometric model, taking account of the fact that both labour and capital limit the production possibilities.