If distortions in the labour market lead to inefficiently highunemployment, and policy makers cannot enter into a binding policy commitment before nominal wages are set, excessive inflation may result due to a credibility problem. This is the famous Kydland&Prescott - Barro&Gordon inflationary...

We examine the incentives of regions in a country to unite or toseparate. We find that smaller regions have greater incentives tounite, relative to larger regions. We show, however, that on thewhole, majority voting on separation and union generates excessiveincentives to separate. This leads us...

Trade unions tend to reduce the dispersion of wages among their members. Skilled workers may therefore have an incentive to separate from an encompassing union and organize into a separate craft union. In this paper, we examine a theoretical model to gain insight into the determinants of the...

Taking technological differences between firms as given, we show that the technologically advanced firm has a stronger incentive for technology licensing under a decentralized unionization structure than with centralized wage setting. Furthermore, We show that, in presence of licensing, the...

Progressive income taxes moderate wage demands by trade unions and thereby reduce unemployment, but alsothey reduce incentives to acquire skills and lower productivity of workers. The optimal response of the governmentto this dilemma is to choose a system of progressive taxes and to (partly)...

We analyse the determinants of unemployment persistence in four OECDcountries byestimating a structural Bayesian VAR with an informative priorbased on an insiders/outsiders model. We explicitly insert unemployment ben-efits and labour taxes so that our identification is not affected by the Faust...

Agents participating in different kind of organizations, usually take different positions in some relational structure. The aim of this paper is to introduce a new framework taking into account both communication and hierachical features derived from this participation. In fact, this new set or...

This paper presents an alternative implementation of firm-level collective wage bargaining, where bargaining proceeds as a finite sequence of sessions between a firm and a union of variable size. We investigate the impact of such a `gradual' union on the wage-employment contract in an economy...