Fiscal Policy, Labour Unions and Monetary Institutions: Their Long Run Impact on Unemployment, Inflation and Welfare

摘要: OBJECTIVES AND MOTIVATION: This paper considers the impact of interactions between fiscal policy and monetary institutions in presence unionized labour markets on economic outcomes welfare long run. Two main classes questions are investigated. First, what is exogenously given taxes unemployment benefits choice by central bank, nominal wages unions, prices monopolistically competitive firms through them unemployment, inflation welfare? Second, how redistribution chosen a (Stackelberg leader) authority whose objectives weighted average social catering to interests political supporters, does general equilibrium induced this affect The framework motivated European scene which fraction force covered collective agreements dominates wage setting market. PLAYERS PAYOFFS: model economy features unions that maximize expected real income union members over states employment bank strives minimize combined costs continuum firms, each maximizes its profits. last part also sets so as combination particular constituencies. Utility from consumption characterized means CES, Dixit-Stiglitz, utility function (as Sidrauski type models) money appears function. METHODOLOGY STRATEGIES: first question investigated within three stage game move commit moves second chooses supply. In third large number picks price. To deal with class expanded feature preliminary government anticipating subsequent responses other players. General used find various institutional parameters.