the firms have heterogeneous productivity, that there are two types of workers with different reservation wages and that a … worker's productivity is independent of his type. We show that equilibrium unemployment arises in the wage-setting game under …

. We solve (i) for the Markov perfect equilibria with no commitment, under the assumption that the union chooses wages each … entire (infinite) sequence of wages. We conclude that the speed of adjustment of employment, that is higher in the … employment and wages only in the no-commitment case, i.e., the higher the relevance of adjustment costs the higher the wage and …

We develop a product market theory that explains why firms invest in general training of their workers. We consider a …-specific training if others do the same, because they would otherwise suffer a competitive disadvantage or need to pay high wages in …

that labour markets clear competitively. At least for Europe, which has been suffering from high unemployment for a long … unemployment which results from the union-firm wage bargaining both with optimal and restricted profit taxation when capital is … the private sector playing a Nash game. The main conclusion is that in the presence of unemployment, the conventional …