In recent years the growth pattern of Greece has been disturbed, as this country is suffering from a persisting economic crisis that goes beyond the usual business cycle. In this paper, we develop a neoclassical growth model of market and political power interactions that explains this crisis....

In this paper, using a dynamic panel of 21 OECD countries, we find that, unlike the other OECD countries in the sample, wage setting institutions, competition conditions, public finances, and external imbalances can account for the behavior of the public sector wage premium (WPR) and the...

This paper develops a dynamic model of bargaining between a firm and union. Capital is assumed to be firm-specific, so only nonnegative investments are possible. Collective bargaining contracts specify the level of the wage rate that will prevail for a fixed contract length, while the firm...