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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/10419/64838
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| Title: | | Union wage setting and international trade  |
| Authors: | | Egger, Hartmut Etzel, Daniel |
| Issue Date: | | 2012 |
| Series/Report no.: | | CESifo Working Paper: Trade Policy 3929 |
| Abstract: | | This paper sets up a general oligopolistic equilibrium model with two countries that differ in the centralization of union wage setting. Being interested in the consequences of openness, we show that, in the short-run, trade increases welfare and employment in both locations, and it raises income of capital owners as well as workers. In the long run, capital outflows from the country with the more centralized wage setting generate winners and losers and make the two countries more dissimilar in terms of unemployment of welfare. Decentralization of wage setting can successfully prevent capital outflow and the export of jobs. |
| Subjects: | | general oligopolistic equilibrium union wage setting asymmetric labor market institutions trade liberalization capital mobility decentralization in union wage setting |
| JEL: | | F12 F16 J51 L13 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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