Wage Moderation and Union Structure.

Models with a single central trade union representing the whole labor market are often taken to illustrate the wage-setting process in the Scandinavian countries. This paper argues that the assumption of a single central trade union is not realistic. Therefore, the authors model an economy with several trade unions. These unions may or may not find it in their interest to cooperate to keep nominal wages down, in effect acting like a central trade union. The authors discuss under what conditions such cooperation is likely to exist. Copyright 1991 by Royal Economic Society.