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Unions, Oligopoly and the Natural Range of Employment

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  • Dixon, Huw David

Abstract

A simple two-sector, general-equilibrium macromodel is presented wi th oligopolistic price determination in the product market and a unionized labor market. In the first stage, unions set the nominal wage, and in the second stage, firms choose outputs given wages. By altering the balance of fiscal policy between the two sectors, the government can achieve a continuum of aggregate employment levels-the natural range of employment. A unique natural rate will occur only i f one requires fiscal policy to be the same in both sectors. This indicates that the natural rate property of some single or representative sect or macromodels is a special case. Copyright 1988 by Royal Economic Society.

Suggested Citation

  • Dixon, Huw David, 1988. "Unions, Oligopoly and the Natural Range of Employment," Economic Journal, Royal Economic Society, vol. 98(393), pages 1127-1147, December.
  • Handle: RePEc:ecj:econjl:v:98:y:1988:i:393:p:1127-47
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    Cited by:

    1. Goerke, Laszlo & Neugart, Michael, 2017. "Social comparisons in oligopsony," Journal of Economic Behavior & Organization, Elsevier, vol. 141(C), pages 196-209.
    2. Laszlo Goerke & Michael Neugart, 2017. "Social comparisons in Oligopsony," IAAEG Discussion Papers until 2011 201704, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
    3. Kolm, Ann-Sofie, 1998. "Differentiated payroll taxes, unemployment, and welfare," Journal of Public Economics, Elsevier, vol. 70(2), pages 255-271, November.
    4. Corneo, Giacomo, 1995. "National wage bargaining in an internationally integrated product market," European Journal of Political Economy, Elsevier, vol. 11(3), pages 503-520, September.
    5. Carlos Usabiaga & Maria Angeles Caraballo, 1996. "An Analysis of the New Keynesian Monopolistic Competition Model," Discussion Papers 1163, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    6. de la Croix, David, 1994. " Wage Interdependence through Decentralized Bargaining," Journal of Economic Surveys, Wiley Blackwell, vol. 8(4), pages 371-403, December.
    7. M. Correa-López, 2006. "A model of unionized oligopoly in general equilibrium," The School of Economics Discussion Paper Series 0605, Economics, The University of Manchester.
    8. Milen V. Velev, 2014. "A Research on the Relationship between the Real Aggregate Output and the Unemployment Rate in Bulgaria," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 3, pages 58-91.
    9. Banerji, A., 2002. "Sequencing strategically: wage negotiations under oligopoly," International Journal of Industrial Organization, Elsevier, vol. 20(7), pages 1037-1058, September.
    10. Ana Paula Martins & Rui Coimbra, 2004. "Efficient Union Contracts in the Presence of Homogeneous Labor and Differentiated Unions," Annals of Economics and Finance, Society for AEF, vol. 5(1), pages 27-46, May.
    11. Petrakis, Emmanuel & Vlassis, Minas, 2005. "The endogenous national minimum wage institution," Journal of Macroeconomics, Elsevier, vol. 27(4), pages 747-762, December.
    12. Kornelius Kraft, 2006. "Wage versus efficient bargaining in oligopoly," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 27(7), pages 595-604.

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