Many participants discussed possible extensions of the model. Some argued that important aspects were left out, which might be problematic from a policy perspective. Others argued that this type of modeling needs to abstract away certain factors and concentrate on the core aspects.
Fredrik Sjöholm discussed the assumption of rigidities in the labor market but not in the capital market. It is certainly true, according to Sjöholm, that labor might be imperfectly mobile between sectors, but the same is presumably the case also for capital: It is difficult to change sewing machines into car plants. Fukunari Kimura agreed and made an argument that capital cannot be adjusted in the short run. In fact, this is the conventional assumption in the literature and if it was to be imposed in this study, the results would turn around. Other participants discussed labor market rigidities and some argued that unemployment makes structural shifts...