A simple two-sector, general-equilibrium macromodel is presented wi th oligopolistic price determination in the product market and a unionized labor market. In the first stage, unions set the nominal wage, and in the second stage, firms choose outputs given wages. By altering the balance of...

This paper considers a model of price-setting oligopoly with perfectly informed consumers, where firms have strictly-convex cost functions. In the standard Bertrand-Edgeworth model, there exists no pure-strategy Nash equilibrium. The author allows firms to choose both price and the quantity that...

The authors explore the incentives for governments to cooperate by expanding expenditure. They have three countries: two are in a monetary union (the EMU). The labour markets of both the EMU countries are unionized and there is involuntary unemployment in equilibrium. The authors explore the...

This paper considers the effect of a unionized nontraded sector on welfare and policy in an open economy. In equilibrium, there are endogenous wage and price setting, there may be unemployment, and non-Walrasian policy effects. Nominal wages and prices become pegged to the price of tradables....