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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/25885
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| Title: | | Stability and dynamics in an overlapping generations economy under flexible wage negotiation and capital accumulation  |
| Authors: | | Koskela, Erkki Puhakka, Mikko |
| Issue Date: | | 2006 |
| Series/Report no.: | | CESifo working paper 1840 |
| Abstract: | | We analyze the stability and dynamics of an overlapping generations model under imperfectly competitive labour markets without population growth and with perfect foresight. Under right-to-manage wage bargaining we assume that wage is negotiated after the decision on the capital stock. With Cobb-Douglas utility and production functions the steady state is unique and the steady state capital stock depends on the trade unions bargaining power. This is because higher bargaining power of the trade union will induce workers to save more thus boosting the capital stock, ceteris paribus. Finally, we show that the steady state equilibrium is a saddle point. |
| JEL: | | J51 C62 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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