Union objectives and indexation externalities in a monopolistically competitive economy
AbstractThis paper extends the literature on indexation externalities by analyzing equilibrium and efficient indexation in a unionized economy characterized by a monopolistically competitive goods market. The assumption that union objectives relate to both employment and the real wage implies that union indexation decisions are associated with a negative externality and, as a consequence, the equilibrium degree of indexation is inefficiently high. This feature is characteristic of both passive and activist policy environments.
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Bibliographic InfoArticle provided by Elsevier in its journal Research in Economics.
Volume (Year): 64 (2010)
Issue (Month): 1 (March)
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Web page: http://www.elsevier.com/locate/inca/622941
Indexation Union objectives Externalities;
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