Nominal Price and Wage Interactions

Torben M. Andersen

Annals of Economics and Statistics, 1995, issue 37-38, 117-131

Abstract: The interaction between price and wage setting is considered in a model with monopolistically product markets and unionized labour markets. It is shown how differential information can cause nominal rigidities which are amplified by the wage-price interactions arising due to strategic complementarity in price and wage setting. Nominal wages may be less flexible than nominal product prices even when there are no informational asymmetries between price and wage decisions.

Date: 1995
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Persistent link: https://EconPapers.repec.org/RePEc:adr:anecst:y:1995:i:37-38:p:117-131

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