Schooling, training, growth and minimum wages

Article Abstract:

The effects of labor market distortion on labor productivity growth are investigated using an exogenously imposed minimum wage legislation as the distortion. Schooling prior to entering the labor market and on-the-job training are the two sources of productivity growth used in the model. Results showed that the effects are ambiguous mainly because minimum wage encourages unskilled workers to undertake more schooling, but makes firms offer less training. Thus, the net effect will be determined by whether which of the two sources dominates the long-run labor productivity growth.

Education, Employee training, Labor productivity, Unskilled labor

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Coordination of fiscal policy among a subset of countries

Article Abstract:

A general equilibrium model of fiscal policy coordination is developed. The model considers unemployment resulting from labor unions with wage bargaining power. Several produced goods that are imperfect substitutes in consumption are assumed to exist, with several countries producing each good. The coordination of fiscal policy among the countries involved is shown to be first best, while coordination among countries producing the same type of good is third best. However, countries that produce the same good still have an incentive to coordinate policies.

Research, Fiscal policy, Equilibrium (Economics)

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Uncertainty and monetary policy in a wage bargaining model

Article Abstract:

The effect of uncertainty and monetary policy on a wage bargaining model is studied. The model determines nominal wages via negotiations amidst an atmosphere of uncertainty. Results indicate the equilibrium unemployment rate increases with monetary uncertainty because of its effect on the risk of wage setters. An inefficient inflation bias may result from discretionary policymaking under time inconsistency. The magnitude of the bias is directly proportional to the degree of uncertainty in the model.

Collective bargaining, Rational expectations (Economics)

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