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An Imperfectly Competitive Open Economy with Sequential Bargaining in the Labour Market

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  • Huw Dixon
  • Michele Santoni

Abstract

We consider a three sector small open economy, with a monopolistic non-traded sector, a competitive traded good sector, and a capital goods sector. In both the consumer good sectors, there are enterprise unions that bargain sequentially over wages and employment as in Manning (1987). This approach encompasses the standard monopoly union, right to manage and efficient bargain models. We consider first the effects of bargaining strengths at each stage on overall macroeconomic equilibrium. Here we find strong general equilibrium spillover effects: bargaining strengths in one sector affecting the other sectors. Second, we consider the influence of the bargaining process on the welfare analysis of fiscal policy.
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Suggested Citation

  • Huw Dixon & Michele Santoni, "undated". "An Imperfectly Competitive Open Economy with Sequential Bargaining in the Labour Market," Discussion Papers 94/4, Department of Economics, University of York.
    • Handle: RePEc:yor:yorken:94/4
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    Cited by:

    1. José M. Martín-Moreno, 1999. "Consumo público e inflación dual," Investigaciones Economicas, Fundación SEPI, vol. 23(2), pages 173-202, May.
    2. Luís F. Costa, "undated". "Product Differentiation, Fiscal Policy, and Free Entry," Discussion Papers 98/20, Department of Economics, University of York.

    More about this item

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining

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