Dynamics of Unemployment, Vacancies and Real Wages with Trade Unions
1985 (English)Report (Other academic)
This paper considers the response of wages, unemployment and vacancies to shocks when the number of job slots and real wages are determined by a Nash bargain between a firm and a small union. Unemployment and vacancies co-exist because of search considerations. There is a unique "natural" unemployment rate that ensures that every firm-union's bargained wage is stationary. Shocks that are eventually absorbed by wages cause deviations of unemployment from its natural rate, because the firm-union initial response to a shock is to change vacancies (and possible wages), which cause changes in unemployment flows via the search process.
Place, publisher, year, edition, pages
Stockholm: IIES , 1985. , 32 p.
Seminar Paper / Institute for International Economic Studies, Stockholm University, ISSN 0347-8769 ; 312
IdentifiersURN: urn:nbn:se:su:diva-41336OAI: oai:DiVA.org:su-41336DiVA: diva2:329513
Published in connection with a visit at the IIES2010-07-122010-07-122010-07-12