Business Cycles and Wage Bargaining

Sjur Flåm, V. Debbia and G. Ricci

Norway; Department of Economics, University of Bergen from Department of Economics, University of Bergen

Abstract: This paper deals with a simple, Keynesian growth model. The main issue is whether Nash bargaining about wages may help to avoid cycles. Our result comes somewhat in the negative: Cycles may still persist. Their existence or emergence is related to violent investment behavior near the long-run, steady-growth path. Thus the prospects for sustained, stable growth appeat to hinge on whether intended investment near equilibrium is dominated by the realized savings or not.

Keywords: GAME THEORY; BUSINESS CYCLES; BARGAINING (search for similar items in EconPapers)
JEL-codes: C78 E32 (search for similar items in EconPapers)
Pages: 12 pages
Date: 1999
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Persistent link: https://EconPapers.repec.org/RePEc:fth:bereco:1099

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