MICROECONOMIC REFORM AND EMPLOYMENT IN THE SHORT-RUN

In the long run microeconomic reform will improve living standards by increasing the quantity of goods and services that the economY can produce with its limited Productive resources. However, in the short run, reform might lead to a reduction in the usage of productive resources, especially labour, rather than to an increase in output. In this paper we examine the short-run relationship between microeconomic reform and employment in Australia using simulations with an applied general equilibrium model.