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A Dynamic Model of Union Membership and Employment: A Comment
Author(s) -
Chang JuinJen,
Lai ChingChong,
Chang WenYa
Publication year - 1998
Publication title -
economica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.532
H-Index - 65
eISSN - 1468-0335
pISSN - 0013-0427
DOI - 10.1111/1468-0335.00118
Subject(s) - economics , raising (metalworking) , stability (learning theory) , interest rate , econometrics , mathematical economics , macroeconomics , mathematics , computer science , geometry , machine learning
This paper re‐examines the dynamic features and the long‐run effects of raising interest rates on union membership and employment in the Jones–McKenna (1994) model. Two major findings emerge from the analysis. First, the dynamic system of Jones and McKenna’s model exhibits saddlepoint stability, rather than global stability. Second, when the economy experiences a rise in interest rate, union membership will eventually converge to a higher level.