A monopoly union model of wage determination with taxes and endogenous capital stock : an empirical application to the finnish manufacturing industry
Holm, Pasi; Honkapohja, Seppo; Koskela, Erkki (21.11.1990)
Numero
24/1990Julkaisija
Bank of FinlandSuomen Pankki
1990
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:bof-201807311807Tiivistelmä
The paper formulates a model of wage determination in accordance with the notion of a monopoly union determining wages after which the firm decides on employment. The novelty is to incorporate investment and capital decisions by firms. In the theoretical part the subgame-perfect Nash equilibrium and its comparative statics for wages, capital stock and employment are characterized in various cases.