It has been argued that the inflationary bias of discretionary monetary policy can be eliminated, and welfare maximized, by the appointment of a central banker who does not care at all about inflation (a 'populist central banker'). We show that this result hinges crucially on the assumption that...

International product market integration enhances both export possibilities through easier access to foreign markets, but also the import threat arising from foreign firms penetrating into the domestic market. These mechanisms affect wage formation and employment creation through many channels...

This paper develops a theoretical model of the <MI>simultaneous<D> determination of union wages and union membership, and empirically implements the model using the 1990 Workplace Industrial Relations Survey. The empirical literature on union wage gaps has long recognized that union membership may be...</d></mi>

Theory predicts that when economies become more integrated through the removal of tariff and other barriers to trade, resulting in an increase in competition in product markets, there should be effects on wage and employment outcomes in labour markets, particularly those in which unions are...

Firing frictions and renegotiation costs affect worker and firm preferences for rigid wages versus individualized Nash bargaining in a standard model of equilibrium unemployment, in which workers vary by observable skill. Rigid wages permit savings on renegotiation costs and prevent workers from...

This Paper examines how different unionization structures affect firms' innovation incentives and industry employment. We distinguish three modes of unionization with increasing degree of centralization: (1) ‘decentralization’ where wages are determined independently at the firm-level, (2)...

We examine the macroeconomic consequences of industry wage-bargaining and product market reforms. We suggest that general equilibrium effects may be important for the evaluation of industry-specific regulations. In particular, we suggest that the European unemployment problem can be traced back...

Most monetary policy analyses assume an atomistic private sector, thereby ignoring strategic interactions between policy and wage-setting decisions. Yet, non-atomistic wage-setters are a key feature of several industrialized economies. We study the economic consequences of non-atomistic agents...

We argue that inequality and rapid deunionization are related, and that skill-biased technical change has been an important factor in deunionization as well as in the rise in inequality. Skill-biased technical change causes deunionization because it increases the outside option of skilled...

We consider a small, unionized economy which interacts with an economically larger one, and we study the growth implications of different institutional structures for the labour markets. We study three possible scenarios. Under decentralized bargaining in the large economy, the two countries...