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Author: | Brauninger, M. |
Title: | Wage Bargaining, unemployment, and growth |
Journal: | Journal of Institutional and Theoretical Economics
2000 : DEC, VOL. 156:4, p. 646-660 |
Index terms: | PAY UNEMPLOYMENT GROWTH |
Language: | eng |
Abstract: | This paper examines interactions between wage bargaining, unemployment, and growth. In the basic model, wage bargaining determines unemployment and is not influence by growth. An increase in unemployment benefits increases and reduces capital accumulation. In a neoclassic framework, the long-run effect is a reduction of income per head. In contract, the wage is not affected. With endogenous growth the wage level increases, but the growth rate declines. Only if growth increases labour market flows, it does have an influence on wage bargaining. Then an increase in growth may increase unemployment, and this, in turn, reduces growth. |
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