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Macroeconomic Effects of Oligopolistic Competition with Wage Bargaining

Correa López, Mónica (2004) Macroeconomic Effects of Oligopolistic Competition with Wage Bargaining. Working Paper. University of Essex, Department of Economics, Economics Discussion Papers, Colchester.

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Abstract

Modelling oligopoly in general equilibrium is about understanding the aggregate effects of the strategic behavior that nonatomistic agents may exhibit in their markets. Real-world economies appear to be characterized by (monopoly) power-endowed agents behaving strategically - namely, firms and unions. By abstracting from this behavior, we risk missing some important features of the macroeconomy. We develop a general equilibrium model of unionized oligopoly aimed at addressing this point. We evaluate the macroeconomic effects of supply-side shocks under alternative product and labor market structures. In addition, the micro foundations of the model capture an alternative channel for the development of strategic interactions among firms, unions and the monetary authority. This channel creates a transmission mechanism for real effects of monetary policy-related shocks, which we investigate. Finally, in the light of the predictions of the model, we discuss macroecomic performance in Continental Europe over the 1990s.

Item Type: Monograph (Working Paper)
Uncontrolled Keywords: Oligopoly, General Equilibrium, Unions, Wage Bargaining.
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Users 161 not found.
Date Deposited: 28 Aug 2014 13:53
Last Modified: 28 Aug 2014 13:53
URI: http://repository.essex.ac.uk/id/eprint/8874

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