Demand and Supply Effects of Bargaining Power Shocks
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Organización Internacional del Trabajo (OIT)
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| Format: | Artículo científico |
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International Labour Organization
2015
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| _version_ | 1874525009833099266 |
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| author | Matthieu Charpe Stefan Kühn |
| author_facet | Matthieu Charpe Stefan Kühn Matthieu Charpe Stefan Kühn |
| contents | Demand and Supply Effects of Bargaining Power Shocks Matthieu Charpe Stefan Kühn In times of crisis, social partners may consider a temporary decline in wages as a necessity to maintain employment. This paper studies the opposing demand and supply effects following declining bargaining power of workers in a New-Keynesian model with search and matching in the labour market. Lower labour income reduces aggregate demand in the presence of credit-constrained consumers. The main result is that falling bargaining power contracts output notably when monetary policy is constrained by the zero lower bound or when agents' expectations about the persistence of the shock adjust slowly. 10.1016/j.econmod.2015.07.004 DOI https://doi.org/10.1016/j.econmod.2015.07.004 publication.journalArticle |
| format | Artículo científico |
| id | ilo_995333292202676 |
| institution | Organización Internacional del Trabajo (OIT) |
| publishDate | 2015 |
| publisher | International Labour Organization |
| spellingShingle | Demand and Supply Effects of Bargaining Power Shocks Matthieu Charpe Stefan Kühn Demand and Supply Effects of Bargaining Power Shocks Matthieu Charpe Stefan Kühn In times of crisis, social partners may consider a temporary decline in wages as a necessity to maintain employment. This paper studies the opposing demand and supply effects following declining bargaining power of workers in a New-Keynesian model with search and matching in the labour market. Lower labour income reduces aggregate demand in the presence of credit-constrained consumers. The main result is that falling bargaining power contracts output notably when monetary policy is constrained by the zero lower bound or when agents' expectations about the persistence of the shock adjust slowly. 10.1016/j.econmod.2015.07.004 DOI https://doi.org/10.1016/j.econmod.2015.07.004 publication.journalArticle |
| title | Demand and Supply Effects of Bargaining Power Shocks |
| url | https://researchrepository.ilo.org/esploro/outputs/journalArticle/Demand-and-Supply-Effects-of-Bargaining/995333292202676 |