6533b85bfe1ef96bd12bb5cd

RESEARCH PRODUCT

Wage-setting coordination in a small open economy

Petteri Juvonen

subject

Economics and Econometricstoimialatkoordinointitalouspolitiikkalabour unionsavoin talousjärjestelmäWage-setting coordinationLabour unionsopen economypalkatwage-setting coordinationammattiliitotpalkkapolitiikka511 EconomicsOpen economy

description

This paper studies wage-setting coordination in a two-sector, open economy dynamic stochastic general equilibrium model. Two large sectoral unions anticipate the effects of their wage demands on aggregate variables. In an open economy, there are externalities that the unions can take into account to increase aggregate welfare, but the strategic interaction between the sectoral unions tends to erode this gain. When wage coordination takes place through a wage norm set by either of the sectors, this minimizes the strategic interaction. However, wage norms create welfare losses as sector-specific wage adjustment is required to make an efficient adjustment to shocks. Peer reviewed

yearjournalcountryeditionlanguage
2022-12-20
10.1111/sjoe.12495http://hdl.handle.net/10138/356887