Monday, August 11, 2008

Greg Mankiw's Blog: Feldstein on Monetary Policy

Greg Mankiw's Blog: Feldstein on Monetary Policy

Perfectly competitive market, neither employers nor employees have market power and where labor is not unionized. Union employee a wide variety of strategies – exertion of power to force employers to pay higher wages. They exercise of power thought strike e.g. do more then imbalance power between employer and employee – where unionization gives employee upper hand. If wage that employer are forced to pay as result of the exercise of union power is higher than the competitive equilibrium wage in this market the unemployment will be created.

  • Monetary policy

  • Union wage premium

  • Enterprise Bargaining Agreement
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