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Unions, monetary shocks and the labour market cycle

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  • Fernández-de-Córdoba, Gonzalo
  • Vázquez, Jesús

Abstract

This paper provides a new growth model by considering strategic behaviour in the supply of labour. Workers form a labour union with the aim of manipulating wages for their own benefit. We analyse the implications on labour market dynamics at business cycle frequencies of getting away from the price-taking assumption. A calibrated monetary version of the union model does quite a reasonable job in replicating the dynamic features of labour market variables observed in post-war U.S. data.

Suggested Citation

  • Fernández-de-Córdoba, Gonzalo & Vázquez, Jesús, 2011. "Unions, monetary shocks and the labour market cycle," Economic Modelling, Elsevier, vol. 28(3), pages 1140-1149, May.
  • Handle: RePEc:eee:ecmode:v:28:y:2011:i:3:p:1140-1149
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