[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/bla/scandj/v115y2013i1p109-140.html
   My bibliography  Save this article

Pattern Bargaining and Wage Leadership in a Small Open Economy

Author

Listed:
  • Lars Calmfors
  • Anna Larsson Seim
Abstract
Pattern bargaining with the tradables (manufacturing) sector as the wage leader is common in Europe. We question the conventional wisdom that such bargaining produces wage restraint. In our model, all forms of pattern bargaining give the same outcomes as uncoordinated bargaining under inflation targeting. Under a monetary union, wage leadership for the non‐tradables sector is conducive to wage restraint, whereas wage leadership for the tradables sector is not. Comparison thinking might lead the follower to set the same wage as the leader. Such equilibria can arise when the leader sector is the smaller sector, and these can promote high employment.

Suggested Citation

  • Lars Calmfors & Anna Larsson Seim, 2013. "Pattern Bargaining and Wage Leadership in a Small Open Economy," Scandinavian Journal of Economics, Wiley Blackwell, vol. 115(1), pages 109-140, January.
    • Handle: RePEc:bla:scandj:v:115:y:2013:i:1:p:109-140
    DOI: j.1467-9442.2012.01731.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1467-9442.2012.01731.x
    Download Restriction: no
    File URL: https://libkey.io/j.1467-9442.2012.01731.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Fabrizio Coricelli & Alex Cukierman & Alberto Dalmazzo, 2006. "Monetary Institutions, Monopolistic Competition, Unionized Labor Markets and Economic Performance," Scandinavian Journal of Economics, Wiley Blackwell, vol. 108(1), pages 39-63, March.
    2. Larsson, Anna, 2011. "On labour mobility and the neutrality of money in unionised economies," Economic Modelling, Elsevier, vol. 28(1), pages 396-403.
    3. Cukierman, Alex & Lippi, Francesco, 1999. "Central bank independence, centralization of wage bargaining, inflation and unemployment:: Theory and some evidence," European Economic Review, Elsevier, vol. 43(7), pages 1395-1434, June.
    4. Steinar Holden & Fredrik Wulfsberg, 2007. "How strong is the case for downward real wage rigidity?," Working Papers 07-6, Federal Reserve Bank of Boston.
    5. Vartiainen, Juhana, 2010. "Interpreting Wage Bargaining Norms," Working Papers 116, National Institute of Economic Research.
    6. David Soskice & Torben Iversen, 2000. "The Nonneutrality of Monetary Policy with Large Price or Wage Setters," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(1), pages 265-284.
    7. repec:bla:scandj:v:104:y:2002:i:2:p:277-87 is not listed on IDEAS
    8. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    9. Bhaskar, V, 1990. "Wage Relativities and the Natural Range of Unemployment," Economic Journal, Royal Economic Society, vol. 100(400), pages 60-66, Supplemen.
    10. Juhana Vartiainen, 2002. "Relative Prices in Monetary Union and Floating," Scandinavian Journal of Economics, Wiley Blackwell, vol. 104(2), pages 277-287, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Camarero, Mariam & D'Adamo, Gaetano & Tamarit, Cecilio, 2014. "Wage leadership models: A country-by-country analysis of the EMU," Economic Modelling, Elsevier, vol. 44(S1), pages 2-11.
    2. Boug, Pål & Brasch, Thomas von & Cappelen, Ådne & Hammersland, Roger & Hungnes, Håvard & Kolsrud, Dag & Skretting, Julia & Strøm, Birger & Vigtel, Trond C., 2023. "Fiscal policy, macroeconomic performance and industry structure in a small open economy," Journal of Macroeconomics, Elsevier, vol. 76(C).
    3. Evangelia Papapetrou & Pinelopi Tsalaporta, 2018. "Macroeconomic outcomes, collective bargaining and intersectoral productivity differentials: a panel approach," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 45(4), pages 765-799, November.
    4. Andreas Wörgötter & Sihle Nomdebevana, 2020. "Aggregate Public-Private Remuneration Patterns in South Africa," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 48(4), pages 461-474, December.
    5. Marit Linnea Gjelsvik & Victoria Sparrman & Ragnar Nymoen, 2015. "Have inflation targeting and EU labour immigration changed the system of wage formation in Norway?," Discussion Papers 824, Statistics Norway, Research Department.
    6. Aleksandra Parteka & Joanna Wolszczak-Derlacz, 2015. "Integrated sectors - diversified earnings: the (missing) impact of offshoring on wages and wage convergence in the EU27," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 13(3), pages 325-350, September.
    7. Andreas Wörgötter & Sihle Nomdebevana, 2019. "Aggregate and sectoral public-private remuneration patterns in South Africa," Working Papers 786, Economic Research Southern Africa.
    8. Marit Gjelsvik & Ragnar Nymoen & Victoria Sparrman, 2020. "Cointegration and Structure in Norwegian Wage–Price Dynamics," Econometrics, MDPI, vol. 8(3), pages 1-15, July.
    9. Bengtsson, Erik, 2019. "The Origins of the Swedish Wage Bargaining Model," Lund Papers in Economic History 195, Lund University, Department of Economic History.
    10. Petteri Juvonen, 2023. "Wage‐setting coordination in a small open economy," Scandinavian Journal of Economics, Wiley Blackwell, vol. 125(1), pages 253-286, January.
    11. Mariam Camarero & Gaetano D’Adamo & Cecilio Tamarit, 2014. "The role of Institutions in explaining wage determination in the Euro Area: a panel cointegration approach," Working Papers 2014/15, Economics Department, Universitat Jaume I, Castellón (Spain).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Calmfors, Lars & Larsson, Anna, 2009. "Pattern Bargaining and Wage Leadership in a Small Open Economy," Seminar Papers 760, Stockholm University, Institute for International Economic Studies.
    2. Vincenzo Cuciniello, 2011. "The Welfare Effect of Foreign Monetary Conservatism with Nonatomistic Wage Setters," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 43(8), pages 1719-1734, December.
    3. Larsson, Anna, 2011. "On labour mobility and the neutrality of money in unionised economies," Economic Modelling, Elsevier, vol. 28(1-2), pages 396-403, January.
    4. Larsson, Anna, 2006. "Monetary Regimes, Labour Mobility and Equilibrium Employment," Seminar Papers 745, Stockholm University, Institute for International Economic Studies.
    5. Christoph S. Weber, 2020. "The unemployment effect of central bank transparency," Empirical Economics, Springer, vol. 59(6), pages 2947-2975, December.
    6. James, Jonathan G. & Lawler, Phillip, 2010. "Union objectives and indexation externalities in a monopolistically competitive economy," Research in Economics, Elsevier, vol. 64(1), pages 28-35, March.
    7. Markus Knell, 2002. "Wage Formation in Open Economies and the Role of Monetary and Wage-Setting Institutions," Working Papers 63, Oesterreichische Nationalbank (Austrian Central Bank).
    8. Nicola Acocella & Giovanni Bartolomeo & Wilfried Pauwels, 2010. "Is there any scope for corporatism in macroeconomic policies?," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 37(4), pages 403-424, November.
    9. Stefano Gnocchi, 2009. "Non‐Atomistic Wage Setters and Monetary Policy in a New Keynesian Framework," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 41(8), pages 1613-1630, December.
    10. Helge Berger & Carsten Hefeker & Ronnie Schöb, 2004. "Optimal Central Bank Conservatism and Monopoly Trade Unions," IMF Staff Papers, Palgrave Macmillan, vol. 51(3), pages 585-605, November.
    11. Lars Calmfors, 2001. "Wages and Wage-Bargaining Institutions in the EMU – A Survey of the Issues," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 28(4), pages 325-351, December.
    12. Acocella, Nicola & Di Bartolomeo, Giovanni, 2004. "Non-neutrality of monetary policy in policy games," European Journal of Political Economy, Elsevier, vol. 20(3), pages 695-707, September.
    13. Holden, Steinar, 2005. "Monetary regimes and the co-ordination of wage setting," European Economic Review, Elsevier, vol. 49(4), pages 833-843, May.
    14. Joanna Tyrowicz, 2009. "When Eastern Labour Markets Enter Western Europe CEECs. Labour Market Institutions upon Euro Zone Accession," Working Papers 2009-03, Faculty of Economic Sciences, University of Warsaw.
    15. Alex Cukierman & Alberto Dalmazzo, 2006. "Fiscal-monetary policy interactions in the presence of unionized labor markets," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 13(4), pages 411-435, August.
    16. Chouliarakis, George & Correa-López, Mónica, 2011. "Monetary institutions, imperfect competition and employment outcomes," The North American Journal of Economics and Finance, Elsevier, vol. 22(2), pages 131-148, August.
    17. Giovanni Di Bartolomeo, 2014. "Optimal Degree of Union Centralization," Studies in Microeconomics, , vol. 2(2), pages 201-211, December.
    18. repec:onb:oenbwp:y::i:63:b:1 is not listed on IDEAS
    19. Chou, Y.K., 2001. "The Impact of Central Bank Independence and Union Concentration on Macroeconomic Perfromance in the Presence of Aggregate Supply Shocks. Evidence from 10 OECD Countries (1971-85)," Department of Economics - Working Papers Series 805, The University of Melbourne.
    20. Bratsiotis, George J., 2008. "Influential price and wage setters, monetary policy and real effects," European Journal of Political Economy, Elsevier, vol. 24(2), pages 503-517, June.
    21. Cukierman, Alex, 2008. "Central bank independence and monetary policymaking institutions -- Past, present and future," European Journal of Political Economy, Elsevier, vol. 24(4), pages 722-736, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:scandj:v:115:y:2013:i:1:p:109-140. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1467-9442 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.