Author: Erkki Koskela
Publisher:
ISBN:
Category :
Languages : en
Pages : 38
Book Description
We study the role of labour and credit market imperfections in the determination of equilibrium unemployment. In the credit market, loan contracts are negotiated between financiers and firms, both of which have bargaining power, while firms and organized labour bargain over the base wage. The sequential labour and credit market negotiations are assumed to take place conditional on the firm having committed to the use performance-related profit sharing in addition to the negotiated base wage. It is shown that, in the presence of profit sharing, intensified credit market competition will raise equilibrium unemployment, because it induces wage-enhancing effects that cause an increase in the outside option available to union members. Equilibrium unemployment, which is also an increasing function of firms' bankruptcy risks, is however independent of the extent of credit market imperfection, provided that the compensation system is unrelated to firms' profits or that there is a monopoly union in the labour market.
Equilibrium Unemployment With Credit and Labour Market Imperfections
Author: Erkki Koskela
Publisher:
ISBN:
Category :
Languages : en
Pages : 38
Book Description
We study the role of labour and credit market imperfections in the determination of equilibrium unemployment. In the credit market, loan contracts are negotiated between financiers and firms, both of which have bargaining power, while firms and organized labour bargain over the base wage. The sequential labour and credit market negotiations are assumed to take place conditional on the firm having committed to the use performance-related profit sharing in addition to the negotiated base wage. It is shown that, in the presence of profit sharing, intensified credit market competition will raise equilibrium unemployment, because it induces wage-enhancing effects that cause an increase in the outside option available to union members. Equilibrium unemployment, which is also an increasing function of firms' bankruptcy risks, is however independent of the extent of credit market imperfection, provided that the compensation system is unrelated to firms' profits or that there is a monopoly union in the labour market.
Publisher:
ISBN:
Category :
Languages : en
Pages : 38
Book Description
We study the role of labour and credit market imperfections in the determination of equilibrium unemployment. In the credit market, loan contracts are negotiated between financiers and firms, both of which have bargaining power, while firms and organized labour bargain over the base wage. The sequential labour and credit market negotiations are assumed to take place conditional on the firm having committed to the use performance-related profit sharing in addition to the negotiated base wage. It is shown that, in the presence of profit sharing, intensified credit market competition will raise equilibrium unemployment, because it induces wage-enhancing effects that cause an increase in the outside option available to union members. Equilibrium unemployment, which is also an increasing function of firms' bankruptcy risks, is however independent of the extent of credit market imperfection, provided that the compensation system is unrelated to firms' profits or that there is a monopoly union in the labour market.
Equilibrium Unemployment with Credit & Labour Market Imperfections
Equilibrium Unemployment and Credit Market Imperfections
Author: Erkki Koskela
Publisher:
ISBN: 9789521000423
Category :
Languages : en
Pages : 30
Book Description
Publisher:
ISBN: 9789521000423
Category :
Languages : en
Pages : 30
Book Description
The Macroeconomics of Labour and Credit Market Imperfections
Author: Etienne Wasmer
Publisher:
ISBN:
Category : Commercial credit
Languages : en
Pages : 48
Book Description
Publisher:
ISBN:
Category : Commercial credit
Languages : en
Pages : 48
Book Description
The Macroeconomics of Labor and Credit Market Imperfections
Profit Sharing, Credit Market Imperfections and Equilibrium Unemployment
Equilibrium Unemployment and Investment Under Product and Labour Market Imperfections
Author: Heikki Kauppi
Publisher:
ISBN: 9789515558213
Category :
Languages : en
Pages : 29
Book Description
Publisher:
ISBN: 9789515558213
Category :
Languages : en
Pages : 29
Book Description
A Steady-state Model of a Non-walrasian Economy with Three Imperfect Markets
Author: Etienne Wasmer
Publisher:
ISBN:
Category :
Languages : en
Pages :
Book Description
Unemployment may depend on equilibrium in other markets than the labor markets. This paper adresses this old idea by introducing search frictions on several markets: in a model of credit and labor market imperfections as in Wasmer and Weil (2004), I further introduce search on the goods market. The model can be solved by blocks: on two of the three markets, the relevant "market tightness" is a constant of parameters. In particular, goods market tightness, expressed as the ratio of unmatched consumers to unmatched firms, is equal to 1 which corresponds to a stochastic Say's law: demand and supply are stochastically in equilibrium. Financial market tightness is also a function of three parameters related to financial frictions. Job creation and employment depend on the equilibrium in the other markets. Reciprocally, higher job destruction implies more volatility of income of individual consumers and higher destruction of consumption matches. This lowers profits and further reduces job creation. Finally, there are complementarities between frictions in each market: in particular, the marginal effect of financial frictions on equilibrium unemployment is amplified by goods market frictions and vice versa. -- search ; matching ; unemployment ; goods market imperfections
Publisher:
ISBN:
Category :
Languages : en
Pages :
Book Description
Unemployment may depend on equilibrium in other markets than the labor markets. This paper adresses this old idea by introducing search frictions on several markets: in a model of credit and labor market imperfections as in Wasmer and Weil (2004), I further introduce search on the goods market. The model can be solved by blocks: on two of the three markets, the relevant "market tightness" is a constant of parameters. In particular, goods market tightness, expressed as the ratio of unmatched consumers to unmatched firms, is equal to 1 which corresponds to a stochastic Say's law: demand and supply are stochastically in equilibrium. Financial market tightness is also a function of three parameters related to financial frictions. Job creation and employment depend on the equilibrium in the other markets. Reciprocally, higher job destruction implies more volatility of income of individual consumers and higher destruction of consumption matches. This lowers profits and further reduces job creation. Finally, there are complementarities between frictions in each market: in particular, the marginal effect of financial frictions on equilibrium unemployment is amplified by goods market frictions and vice versa. -- search ; matching ; unemployment ; goods market imperfections
Labor Market Imperfections and Thick Market Externalities from Innovation
Author: Daron Acemoglu
Publisher:
ISBN:
Category : Economics
Languages : en
Pages : 44
Book Description
Publisher:
ISBN:
Category : Economics
Languages : en
Pages : 44
Book Description