| Abstract: | Summary This paper analyses the impact of  globalisation of economic relationships on the European labour market. The main finding is that Europe's unemployment problem is rooted in rigidities in the labour market itself, while the increasing importance of international trade should provide an opportunity to reduce long-term labour market slack. To reap the potential benefits in this respect, European governments would need to re-orient structural policies towards a better functioning of labour and product markets.Organisation for Economic Co-operation and Development (OECD), Economics Department, Paris. The author is indebted to several of his colleagues in the Economics Department — in particular Bob Ford, Katie Gordon, Wim Suyker, Thorsteinn Thorgeirsson, and Nick Vanston — and two anonymous referees for their useful comments on an earlier draft. The views expressed in this paper are those of the author and should not be attributed to the Organisation or the governments of its member countries. |
