Wages, Money, and Exchange Rates: With Endogenous Unions and Governments
1986 (English)Report (Other academic)
This paper analyzes the role and macroeconomic impact of monetary and exchange rate policy as well as of wage formation in open economies where wages are primarily determined through collective bargaining among powerful labor unions and relatively weak employers. Applying some elements of game theory, the paper treats the government and unions as endogenous, and explores the macroeconomic consequences of their interaction. In particular, the paper argues, and demonstrates by numerical examples, that the ultimate effects of monetary expansion or devaluation (as well as of exogenous wage hikes) on incomes and prices depend cricually in the reaction patterns of both unions and government.
Place, publisher, year, edition, pages
Stockholm: IIES , 1986. , 41 p.
Seminar Paper / Institute for International Economic Studies, Stockholm University, ISSN 0347-8769 ; 370
IdentifiersURN: urn:nbn:se:su:diva-41551OAI: oai:DiVA.org:su-41551DiVA: diva2:331149