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Equilibres multiples avec chômage, coûts de transaction et concurrence monopolistique

Ludovic Julien and Nicolas Sanz ()

EconomiX Working Papers from University of Paris Nanterre, EconomiX

Abstract: The properties of WS-PS model are modified when trade activity is explicitly modelled. We introduce transaction costs on the output market to capture multiplicity whatever the degree of returns to scale. The price setting curve can become downward-sloping in the unemployment rate-real wage space. Trading externalities reinforce the effect of strategic complementarities between firms, leading to multiple unemployment equilibria. Moreover, a positive shock on the bargaining power of workers decreases the unemployment rate and the real wage at the low equilibrium, but increases both of them at the high equilibrium.

Keywords: Multiple unemployment equilibria; transaction costs; monopolistic competition. (search for similar items in EconPapers)
JEL-codes: D43 E25 J64 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2006
New Economics Papers: this item is included in nep-mac
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Handle: RePEc:drm:wpaper:2006-6