Template-type: ReDIF-Paper 1.0
Author-Name: Bertola, Giuseppe
Author-Email: giuseppe.bertola@edhec.edu
Author-Name:  Lo Prete,Anna
Author-Email: anna.loprete@unito.it
Author-Workplace-Name: University of Turin
Author-Workplace-Homepage: http://www.est.unito.it/
Title: Reforms, Finance, and Current Accounts.
Abstract: We analyze the implications of labor market reforms for an open economy’s human capital investment and 
future production. A stylize d model shows that labor market deregulation can imply more positive current account 
balances if financial markets are imperfect and labor market institutions not only distort labor allocation, but 
also smooth income. Empirically, in OECD country-level panel data, we find that labor market deregulation has been 
positively related to current account surpluses on average and more strongly so when and where financial market 
access was more limited. These results are robust to inclusion of standard determinants of current account imbalances,
and do not appear to be driven by cyclical phenomena.
Length: 32 pages
Creation-Date: 2015-02
File-URL: http://www.est.unito.it/do/home.pl/Download?doc=/allegati/wp2015dip/wp_8_2015.pdf
File-Format: Application/PDF
Handle: RePEc:uto:dipeco:201508