In general, empirical studies having evaluated with firm individual data the effects of structural labour market reforms in European countries do not reach unambiguous conclusions. In particular, they find that reforms increasing incentives to lower the number of temporary labour contracts do...

This paper examines the effects of introducing a non Walrasian labour market into the "New Neoclassical Synthesis'' framework. A dynamic stochastic general equilibrium model is formulated, solved, and calibrated in order to evaluate its ability to replicate the main features of the Euro area...