EconPapers    
Economics at your fingertips  
 

Indeterminacy in a Finance Constrained Unionized Economy

Teresa Lloyd-Braga () and Leonor Modesto ()

No 4679, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We introduce labour market imperfections (i.e. unions and the existence of a wage floor) in a finance-constrained monetary economy with heterogenous agents and increasing returns to scale due to labour and capital productive externalities. We find that indeterminacy emerges for empirically plausible values of the parameters, compatible with a downward-sloping marginal productivity of labour curve. Moreover, we show that indeterminacy and Hopf bifurcations are possible with an (arbitrarily) small degree of (total) externalities provided that the share of labour externalities exceed a lower bound, which decreases with union power. We also find that unions increase simultaneously steady-state employment, capital accumulation and welfare if the marginal productivity of labour is decreasing in employment.

Keywords: bifurcations; externalities; indeterminacy; unions (search for similar items in EconPapers)
JEL-codes: D60 D62 E32 J51 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac
Date: 2004-10
References: Add references at CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=4679 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: Indeterminacy in a finance constrained unionized economy (2007) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:4679

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... ers/dp.php?dpno=4679

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().

 
Page updated 2019-12-10
Handle: RePEc:cpr:ceprdp:4679