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Sequential bargaining in a new-Keynesian model with frictional unemployment and staggered wage negotiation

Grégory de Walque (), Olivier Pierrard (), Henri Sneessens () and Raf Wouters ()

No 33, BCL working papers from Central Bank of Luxembourg

Abstract: We build a model with frictional unemployment and staggered wage bargaining and we assume that hours worked are negotiated every period. We analyze the role of workers? bargaining power in the hours negotiation on unemployment volatility and inflation persistence. The closer to zero is this parameter, (i ) the more firms adjust on the intensive margin, reducing employment volatility, (ii ) the lower the effective workers? bargaining power for wages and (iii ) the more important is the hourly wage in the marginal cost determination. Combining staggered wage bargaining with some degree of workers? bargaining power in the hours negotiation, we produce realistic labor market statistics together with inflation persistence.

Keywords: DSGE; Search and Matching; Nominal Wage Rigidity; Monetary Policy (search for similar items in EconPapers)
JEL-codes: E31 E32 E52 J64 (search for similar items in EconPapers)
Date: 2008-07
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Published in Annals of Economics and Statistics, 2009, 96(2): 221-250.

Downloads: (external link)
http://www.bcl.lu/fr/Recherche/publications/cahiers_etudes/33/BCLWP033.pdf (application/pdf)

Related works:
Journal Article: Sequential Bargaining in a Neo-Keynesian Model with Frictional Unemployment and Staggered Wage Negotiations (2009) Downloads
Working Paper: Sequential bargaining in a new-Keynesian model with frictional unemployment and staggered wage negotiation (2009) Downloads
Working Paper: Sequential Bargaining in a New-Keynesian Model with Frictional Unemployment and Staggered Wage Negotiation (2009) Downloads
Working Paper: Sequential bargaining in a New Keynesian model with frictional unemployment and staggered wage negotiation (2009) Downloads
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