Union Power and Price Fixation: A General Equilibrium Perspective

Christian Arnsperger and David de la Croix
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Christian Arnsperger: UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)

No 1990015, LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: Wage and price formation are analysed in a general equilibrium model combining wage bargaining, monopolistic competition, stochastic demand, and technological constraints. The alternative implications of "efficient" and "right-to-manage" models of bargaining are studied. The price-cost margin is less favorable to firms with efficient bargaining. A Phillips-like wage relationship obtains only in the right-to-manage case, although the interpretation of the role of unemployment is more complex than in standard models. Aggregate demand remains neutral despite bargaining, but fixed nominal strike payments are enough to create non-neutrality.

Keywords: economic equilibrium; competition; wages (search for similar items in EconPapers)
JEL-codes: O23 (search for similar items in EconPapers)
Pages: 29
Date: 1990-04-01
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:1990015

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