Endogenous Determination of Trade Regime and Bargaining Outcome
CSGR Working Paper No. 40/99
21 Pages Posted: 20 Mar 2000
Date Written: October 1999
We show that whether trade is one-way or two-way depends on wage strategies adopted by trade unions. The union?s wage strategy choices themselves depend upon the conditions under which trade takes place, as well as upon the characteristics of both the labour and the product markets in the trading countries. The impact of economic integration on union choices and therefore upon both labour market and trade outcomes is shown to vary according to the nature of the prevailing trade regime. We generate testable hypotheses and discuss the implications for the development of econometric tests of these hypotheses.
JEL Classification: F15, J5, L13
Suggested Citation: Suggested Citation