Labour Monopoly as the Source of Money Wage Rigidity: A Hypothesis

In this paper, we develop a model of business cycle fluctuations between two interacting open economies within the disequilibrium or non-market clearing paradigm. We analyze the main feedback mechanisms (Keynes, Mundell, Rose and Dornbusch) driving the dynamics and the conflict between their stabilizing and destabilizing tendencies and how these depend on certain key speeds of adjustment in the real and foreign exchange sectors. We explore numerically a variety of situations of interacting price cycles in the two countries, where the steady state is locally repelling, but where the overall dynamics are bounded in an economically meaningful domain by assuming downward money wage rigidity.

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Money Wage Rigidity in an Economy with Rational Trade Unions

Recent Advances in Labour Economics ◽

10.4324/9780429398711-5 ◽

2018 ◽

pp. 61-76

Author(s):

Richard Jackman

Keyword(s):

Trade Unions ◽

Wage Rigidity ◽

Money Wage

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Money Wage Rigidity, Monopoly Power and Hysteresis

Path Dependency and Macroeconomics ◽

10.1057/9780230251090_5 ◽

2009 ◽

pp. 162-208 ◽

Cited By ~ 5

Author(s):

Alfonso Palacio-Vera

Keyword(s):

Monopoly Power ◽

Wage Rigidity ◽

Money Wage

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The Economics of wages and wages policy in the depression and recovery period: distinctive elements in the New Zealand debate, 1931- 1936

New Zealand Journal of Industrial Relations ◽

10.26686/nzjir.v15i1.3485 ◽

1970 ◽

Vol 15 (1) ◽

Author(s):

A. M. Endres

Keyword(s):

New Zealand ◽

Real Wage ◽

Labour Productivity ◽

Recovery Period ◽

Prima Facie ◽

Currency Devaluation ◽

Money Wage ◽

Distinctive Features ◽

Compulsory Arbitration ◽

Wage Cuts

This article discusses distinctive features of the New Zealand debate on the economics of wages and wages policy from 1931 up to the restoration of compulsory arbitration in 1936. Local economic orthodoxy proffered advice which, consistent with Keynes (1936), turned on the need for a general real wage reduction effected mostly through currency devaluation, rather than through further money wage cuts. Dissenters were critical of currency devaluation; they stressed excessively generous unemployment relief, real wage 'overhang' and structural real wage distorttons. Tentative estimates of both aggregate real product wage and labour productivity changes demonstrate, prima facie, that at least one strand in the dissenting argument was defensible.

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