Consider the Calmfors and Driffill (1988) model of centralization of wage bargaining and unemployment. They argue that unions operating at the individual firm level have limited market power while those at the sectoral level can exert some market power but ignore the macroeconomic implications of their actions. Use relevant illustrations to discuss why at the national level unions take into consideration the macroeconomic implications of their actions
Consider the Calmfors and Driffill (1988) model of centralization of wage bargaining and unemployment. They argue that unions operating at the individual firm level have limited market power while those at the sectoral level can exert some market power but ignore the macroeconomic implications of their actions. Use relevant illustrations to discuss why at the national level unions take into consideration the macroeconomic implications of their actions
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Consider the Calmfors and Driffill (1988) model of centralization of wage bargaining and
unemployment. They argue that unions operating at the individual firm level have limited
market power while those at the sectoral level can exert some market power but ignore the
the national level unions take into consideration the macroeconomic implications of their
actions
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