In a framework of a unionised international Bertrand duopoly with differentiated products, this paper analyses national labour market interdependencies and the consequences of trade liberalisation for union wages. The analysis suggests that national wages are likely to be strategic complements...

OBJECTIVES AND MOTIVATION: This paper considers the impact of interactions between competitiveness, fiscal policy and monetary institutions in the presence of unionized labor markets on economic outcomes and welfare in the long run. Two main classes of questions are investigated. First, what is...

This paper analyzes the effects of trade and labor market liberalization on wages and worker productivity/effort in a domestic unionized firm with firm-union bargaining over wages and effort. It is shown that both types of liberalization will induce a cold shower effect(a rise in effort) if the...