Monopoly Unions and the Liberalisation of International Trade.

The authors examine the effects of removing tariffs and trade barriers on the behavior of utilitarian trade unio ns using a two-country macroeconomic model. A "hump-shaped" relationshi p between wages and the degree of corporatism emerges here, analogousl y with closed-economy models. The completion of the internal market is shown to bid product wages down and boost employment, to raise consumption wages, and unambiguously to raise welfare. The removal o f trade barriers makes unions more likely to want to cooperate with unions abroad. Copyright 1993 by Royal Economic Society.