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We model cooperation between an employer and a workers' union as an equilibrium in an infinitely repeated game with discounting and imperfect monitoring. The employer has private information about firm profitability. The model explains the incidence and duration of strikes, as well as the...
Persistent link: https://www.econbiz.de/10005791411
Can stringent labor laws be efficient? Possibly, if they provide firms with a commitment device to not punish short-run failures and thereby incentivize the pursuit of value-maximizing innovative activities. In this paper, we provide empirical evidence that strong labor laws indeed appear to...
Persistent link: https://www.econbiz.de/10004980205
OBJECTIVES AND MOTIVATION: This paper considers the impact of interactions between fiscal policy and monetary institutions in the presence of unionized labour markets on economic outcomes and welfare in the long run. Two main classes of questions are investigated. First, what is the impact of...
Persistent link: https://www.econbiz.de/10005124139
This paper provides a brief overview of the East German employment problem and presents a simple model in which to evaluate two rival policy proposals: wage subsidies and revenue-sharing subsidies. Revenue-sharing subsidies have received little, if any, attention in the ongoing public debate on...
Persistent link: https://www.econbiz.de/10005124179
This paper develops a framework for studying the interactions between labour unions, fiscal policy, monetary policy and monopolistically competitive firms. The framework is used to investigate the effects of labour taxes, the replacement ratio, labour market institutions and monetary...
Persistent link: https://www.econbiz.de/10005124224
We construct an overlapping generations model with unemployment risk where wages, employment and severance payments are set through efficient bargaining between risk averse Unions and risk neutral firms. Assuming that a First Best cannot be achieved due to workers' shirking incentives, we...
Persistent link: https://www.econbiz.de/10011084577
In this paper we analyse the underlying causes behind Spanish unemployment which is now at 24%. We interpret this unfortunate outcome as the result of a series of adverse shocks, compounded by disinflationary policies and by a flawed system of labour market institutions. Our aim is to explain...
Persistent link: https://www.econbiz.de/10005667046
This paper reviews theoretical and empirical aspects of the interaction between Europe’s Economic and Monetary Union and recent labour market developments. Policies meant to increase and stabilize labour incomes also tend to reduce employment and productivity: theory suggests that the latter...
Persistent link: https://www.econbiz.de/10005791551
The literature on monetary policy games establishes that policy makers' attempts to boost employment above the 'natural' rate are futile and result in an inflationary bias when wage setters have rational expectations and the policy maker cannot precommit. This implies that a variation of the...
Persistent link: https://www.econbiz.de/10005791594
If capital becomes internationally mobile but labor does not, is the bargaining outcome for workers worsened? In this paper we show that the answer to this question depends critically on the information structure of the bargaining process. In particular, we demonstrate a hitherto...
Persistent link: https://www.econbiz.de/10005791970