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Industrial dynamics and employment in Europe

Objective



The research project aims at explaining the relationship between the restructuring of the European economies and the employment issue, by considering its variable forms, its timing and evolution.

The disequilibria affecting European countries in the decades starting with the seventies have been interpreted as the result of the inability of markets to cope with and to adapt to major changes in the general, economic environment (changes in technology as well as in the conditions and forms of industrial competition) that themselves were correlated with information imperfections and with the absence of appropriate counter-balancing institutions and incentive rules. In particular, the occurrence of mass unemployment in Europe has been imputed to structural maladjustments associated with an over-regulation of labour markets. By contrast, the perspective pursued in this research relies upon an altogether different line of interpretation of past economic histories and events as well as of the current dynamic paths of the crucial monitoring variables.
In a nutshell, the explanation of the diverging performances of the Western countries (notably, in terms of the dynamic behaviours of unemployment) will not be sought uniquely in differences in the mechanisms controlling their labour market. It will also be located in their different investment behaviours. The disequilibria observed and their persistence, in fact, appear to be the shortcoming of inherited distortions in the structure of the countries' productive capacity, which itself descend from the conditions under which the process of capital accumulation has taken place. The distortions to be taken into due consideration and to form the focus of our analysis are not those affecting the relations between production sectors, as the interdependence among them is necessarily changing along with the unfolding of innovation processes. They are, rather, the distortions which affect the relationship between investment and consumption within an economy while it is undergoing a process of qualitative change. The proposed research will aim at producing an empirical analysis on a cross country comparative perspective, as the appropriate background for policy formulation and implementation. To this end, it will begin by examining data on major features exhibited by the processes of structural change in the recent histories of the European countries. and in particular the changes in the structure of their productive capacity. It will, then, turn to develop a model for the interpretation of the relationship between structural change and macroeconomic disequilibria. Next, it will focus on a broad analytical issue, to what extent structural changes explain the employment experience capturing its variety across countries.

The final target is the formulation of recommendations for policies acting on the vital connections between the macroeconomic scenarios, structural reforms and innovation-enhancing policy measures.

Funding Scheme

CSC - Cost-sharing contracts

Coordinator

CENTRE NATIONAL DE LA RECHERCHE SCIENTIFIQUE
Address
2503,Rue Albert Einstein 250, Sophia Antipolis
06560 Valbonne
France

Participants (2)

Technische Universität Wien
Austria
Address
8/119,Argentinierstraße 8/119
1040 Wien
UNIVERSITÀ DEGLI STUDI DI SIENA
Italy
Address
Piazza San Francesco 17
53100 Siena