Classical Unemployment, Accommodation Policies and the Adjustment of Real Wages
1984 (English)Report (Other academic)
The paper develops a model of wage formation and stabilization policy in economies with centralized wage setting and strong trade unions. The aim is to explain the present stagflation with heavy unemployment and large government deficits. The analysis gives a theoretical underpinning to the assertion that accommodation policies may cause wage inflation and in the end reduce employment. Various methods of accomplishing a real wage adjustment are discussed: (1) a policy of complete non-accommodation; (2) continued accommodation policies but with lower employment targets; (3) social contracts; and (4) tax-based incomes policies (TIP).
Place, publisher, year, edition, pages
Stockholm: IIES , 1984. , 44 p.
Seminar Paper / Institute for International Economic Studies, Stockholm University, ISSN 0347-8769 ; 270
IdentifiersURN: urn:nbn:se:su:diva-41236OAI: oai:DiVA.org:su-41236DiVA: diva2:329161