Modelling Market Power in Labour and Product Markets in a Dynamic Economy
AbstractIn this paper a unified framework is developed for modeling imperfect competition in a monopolistic economy in a dynamic setting. Concentrating on the steady state analysis, a graphical approach is developed in consumption/leisure space. In both cases, there is a distortion towards leisure and away from consumption/work. The unionized economy is dynamically efficient, in the sense that the marginal product of capital equals discount rate. However, the monopolistic economy is not: the marginal product of capital exceeds the discount rate. This enables us to compare the outcomes in terms of productivity, utility and employment.
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Bibliographic InfoArticle provided by Cyprus Economic Society and University of Cyprus in its journal Ekonomia.
Volume (Year): 4 (2000)
Issue (Month): 2 (Winter)
Other versions of this item:
- Huw D. Dixon, . "Modelling Market Power in Labour and Product Markets in a Dynamic Economy," Discussion Papers 00/20, Department of Economics, University of York.
- E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
- H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
- J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining
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