@techreport{Gersbach2001Awareness,
abstract = {We examine wage-bargaining in a two-sector economy when employers and labor unions in
each sector are not always aware of all general equilibrium feedback effects. We show
analytically that if agents only consider labor demand effects, low real wages and low
unemployment result. With an intermediate view, i.e. when partial equilibrium effects within a
sector are taken into account, high real wages and unemployment result. If all general
equilibrium effects are considered at once, low real wages and low unemployment again
result. The assumption that unions and employers? federations are not able to incorporate all
feedback effects from other sectors may explain the persistence of high unemployment in
Europe.},
author = {Hans Gersbach and Achim Schniewind},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {D58; E24; L13; J60; 330; Sectoral wage-bargaining; awareness of general equilibrium effects; unemployment; Theorie der Arbeitslosigkeit; Lohnverhandlungstheorie; Arbeitsmarkttheorie; Gleichgewicht; Arbeitslosigkeit; Hysteresis; Theorie},
language = {eng},
number = {394},
title = {Awareness of General Equilibrium Effects and Unemployment},
type = {IZA Discussion paper series},
url = {http://hdl.handle.net/10419/21254},
year = {2001}
}
