The wage bargaining structure and the inflationary bias

Article Abstract:

The failure of disinflation programs in terms of bringing wages down with other nominal variables stem from the gap formed or the inflationary bias between the wages required by the unions and the real wage targets set by the government. The degree of inflationary gap depends on the authority of the unions to set wages cooperatively or separately. This behavior is summed up in a one-shot game equilibrium and the alternate scenario where a non-inflationary cooperative equilibrium is developed can be modeled after the subgame perfect and weakly renegotiation proof equilibrium model.

Economics, Research and Development in the Social Sciences and Humanities, Labor Unions, Labor Unions and Similar Labor Organizations, Inflation (Finance), Wages, Wages and salaries, Macroeconomics, Inflation (Economics)

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Precautionary saving and economic growth

Article Abstract:

A modified standard neoclassical growth model is used to analyze the growth path of an economy where consumers save to protect themselves against idiosyncratic risks. A general equilibrium model shows the impact of precautionary saving are greater than those found by earlier research that assumes both the interest rate and the average rate as exogenous. Further, the dynamic properties of the model indicates that there is no steady-state equilibrium when there is high degree of uncertainty and that any growth path must be nonmonotonic.

Research, Savings, Neoclassical economics

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Economic growth models with trade unions: NAIRU and union behavior

Article Abstract:

An analysis of economic development models which include the non-accelerating inflation rate of unemployment is presented. The analysis focuses on economic growth based on Keynesian principles and considers labor union behavior in terms of the monopoly union model. It is shown that instability can occur when unions exercise weaker bargaining power. In addition, trade union behavior can generate leverage for a capitalist economy to develop.

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