Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/33259
Authors: 
Palokangas, Tapio
Year of Publication: 
2005
Series/Report no.: 
IZA Discussion Papers 1592
Abstract: 
We examine a common market which expands by integrating new regions. Capitalists are strategically interdependent through the goods market and they improve their productivity through R&D. Production and R&D employ unionized workers. The purpose of integration is to maximize a weighed average of workers' and capitalists' utilities. The main findings are as follows. Integration benefits capitalists more than workers. If labour unions are strong enough, then the common market can expand indefinitely. Otherwise, there is an upper limit for integration. This is the higher, the higher producer market power or the stronger the capitalists' political influence.
Subjects: 
economic integration
market power
endogenous growth
JEL: 
F15
J50
O40
Document Type: 
Working Paper

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