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Wage Interdependence and Competitiveness

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  • de la Croix, David

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES); Belgian National Fund for Scientific Research (FNRS); University of Limburg, Maastricht)

Abstract

We build a multi-sector model with wage bargaining and imperfect competition to analyse the links between wage interdependence and competitiveness. Quantity constraints together with union power, firm market power and wage externalities play a significant role in the determination of competitiveness and in the transmission of shocks among sectors. This is verified by an empirical study on Belgian data. We identify leading sectors in wage formation and evaluate the effect of sector-specific shocks on the competitiveness of the other sectors.

Suggested Citation

  • de la Croix, David, 1992. "Wage Interdependence and Competitiveness," LIDAM Discussion Papers IRES 1993002, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    • Handle: RePEc:ctl:louvir:1993002
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    Cited by:

    1. Drakopoulos, Stavros A., 2007. "Comparison Wage in Trade Union Decision Making," MPRA Paper 46287, University Library of Munich, Germany.
    2. Drakopoulos, Stavros A., 2008. "The Concept Of Comparison Income: An Historical Perspective," MPRA Paper 8713, University Library of Munich, Germany.
    3. de la Croix, David, 1994. "Wage Interdependence through Decentralized Bargaining," Journal of Economic Surveys, Wiley Blackwell, vol. 8(4), pages 371-403, December.

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    Keywords

    competition; wages;

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