Classical Unemployment, Accommodation Policies and the Adjustment of Real Wages

Lars Calmfors and Henrik Horn
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Lars Calmfors: Institute for International Economic Studies

A chapter in Trade Unions, Wage Formation and Macroeconomic Stability, 1986, pp 92-119 from Palgrave Macmillan

Abstract: Abstract A model of wage formation and stabilization policy in economies with strong trade unions is developed. The analysis provides a theoretical underpinning for the assertion that accommodation policies may cause wage inflation and ultimately reduce employment. Various methods of accomplishing a real wage adjustment are discussed: (I) a policy of complete nonaccommodation; (2) continued accommodation policies but with lower employment targets; (3) social contracts; and (4) tax-based incomes policies (TIP).

Keywords: Trade Union; Real Wage; Unemployment Benefit; Policy Rule; Indifference Curve (search for similar items in EconPapers)
Date: 1986
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-08596-5_6

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DOI: 10.1007/978-1-349-08596-5_6

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