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Wage Interdependence through Decentralized Bargaining

  • de la Croix, David

The idea that sector-specific unions are influenced by the wages obtained by other unions has mainly been used to support the empirical observation that wages are highly correlated among industries. The sources of wage interdependence can mainly be found in unions' preferences, in the nature of technology and in price and demand determination. The presence of externalities and of strategic complementarity among unions leads to suboptimal equilibria, which generates non-desired inflation, unemployment and possibly also trade balance deficit. This enforces the idea that part of current unemployment can be eliminated by improving the cooperation between social actors. Copyright 1994 by Blackwell Publishers Ltd

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Article provided by Wiley Blackwell in its journal Journal of Economic Surveys.

Volume (Year): 8 (1994)
Issue (Month): 4 (December)
Pages: 371-403

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Handle: RePEc:bla:jecsur:v:8:y:1994:i:4:p:371-403
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  2. SNEESSENS, Henri R. & SHADMAN-MEHTA, Fatemeh, 1994. "Real Wages, Skill Mismatch and Unemployment Persistence," CORE Discussion Papers 1994050, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  3. David DE LA CROIX, 1993. "Externalities in Wage Formation and Structural Unemployment," Annales d'Economie et de Statistique, ENSAE, issue 32, pages 17-41.
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  9. Andersen, Torben M. & Christensen, Michael, 1989. "Relative wages and employment fluctuations," Journal of Macroeconomics, Elsevier, vol. 11(4), pages 477-492.
  10. de la Croix, David, 1992. "Wage Interdependence and Competitiveness," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1993002, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  11. Yellen, Janet L, 1984. "Efficiency Wage Models of Unemployment," American Economic Review, American Economic Association, vol. 74(2), pages 200-205, May.
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  13. Hans Jørgen Jacobsen & Christian Schultz, 1987. "A General Equilibrium Macro Model with Wage Bargaining," Discussion Papers 87-05, University of Copenhagen. Department of Economics.
  14. McDonald, Ian M & Solow, Robert M, 1981. "Wage Bargaining and Employment," American Economic Review, American Economic Association, vol. 71(5), pages 896-908, December.
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  16. Arnsperger, Christian & de la Croix, David, 1993. "Bargaining and equilibrium unemployment : Narrowing the gap between New Keynesian and 'disequilibrium' theories," European Journal of Political Economy, Elsevier, vol. 9(2), pages 163-190, May.
  17. Calvo, Guillermo A., 1983. "Staggered prices in a utility-maximizing framework," Journal of Monetary Economics, Elsevier, vol. 12(3), pages 383-398, September.
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  19. Ken Binmore & Ariel Rubinstein & Asher Wolinsky, 1986. "The Nash Bargaining Solution in Economic Modelling," RAND Journal of Economics, The RAND Corporation, vol. 17(2), pages 176-188, Summer.
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  22. Akerlof, George A, 1969. "Relative Wages and the Rate of Inflation," The Quarterly Journal of Economics, MIT Press, vol. 83(3), pages 353-74, August.
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  25. Fethke, Gary & Policano, Andrew, 1984. "Wage contingencies, the pattern of negotiation and aggregate implications of alternative contract structures," Journal of Monetary Economics, Elsevier, vol. 14(2), pages 151-170, September.
  26. Gylfason, Thorvaldur & Lindbeck, Assar, 1984. "Union Rivalry and Wages: An Oligopolistic Approach," Economica, London School of Economics and Political Science, vol. 51(202), pages 129-39, May.
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