Employment and Wage Bargaining in an Open Monetary Union
REVIEW OF INTERNATIONAL ECONOMICS
Posted: 21 Mar 1997
This paper studies the incidence of alternative patterns of wage bargaining in an open two-country monetary Union. Wages are fixed by trade-unions for two periods, either at the national or the monetary Union level. It is shown that the best solution regarding unemployment depends on the nature of externalities and dynamic strategic interactions between the monetary Union's countries, namely on the openness degree of the monetary Union and the differentiation index between national goods.
JEL Classification: F41, J5
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