This article compares the effects of increasing traditional welfare to introducing in-work benefits in the 15 (pre-enlargement) countries of the European Union. We use a labour supply model encompassing responses to taxes and transfers along both the intensive and extensive margins, and 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....

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...

Systematic monetary policy is analysed in a two-period extension of standard, static New Keynesian models. It is shown that countercyclical policies increase the band of inaction of the price setters, and that this feedback effect on price rigidity may make such policies "self-justifying"; that...