Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/41562 
Year of Publication: 
2010
Citation: 
[Journal:] Economics: The Open-Access, Open-Assessment E-Journal [ISSN:] 1864-6042 [Volume:] 4 [Issue:] 2010-30 [Publisher:] Kiel Institute for the World Economy (IfW) [Place:] Kiel [Year:] 2010 [Pages:] 1-37
Publisher: 
Kiel Institute for the World Economy (IfW), Kiel
Abstract: 
Although coordination of wage bargaining probably affects entry barriers and competition in product markets, research on price determination has typically not considered such factors. We argue that the price markup depends on wage setting institutions and present empirical evidence in form of estimated price equations in a panel of 15 OECD countries. The estimates show that consumer prices may be as much as 21 percent higher in coordinated compared to uncoordinated countries, solely due to the effect of coordination on the markup. Since other studies find that coordination has a dampening effect on wages, this may explain why there is no clear effect of coordination on unemployment.
Subjects: 
Imperfect competition model
price markup
labor market institutions
unemployment
panel data model
JEL: 
C23
E31
J51
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article

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