Economic Integration, Lobbying by Firms and Workers, and Technological Change

Tapio Palokangas

DEGIT Conference Papers from DEGIT, Dynamics, Economic Growth, and International Trade

Abstract: I examine a common market with the following institutions. Oligopolistic firms improve their productivity by R&D. Wages are determined by union-employer bargaining. Firms and workers lobby the authority that accepts new members and regulates unions' and firms' market power. The main findings are as follows. Small common markets have incentives to expand, but large ones are indifferent to new members. With product market deregulation, there is an upper limit for the size of the common market and the growth rate diminishes with integration.

Keywords: economic integration; labor unions; market power; endogenous technological change (search for similar items in EconPapers)
JEL-codes: F15 J50 O40 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2008-11
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