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Wages and Employment: A Framework for Analysis with Application to Three Policy Issues *
Author(s) -
PISSARIDES CHRISTOPHER A.
Publication year - 1987
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/j.1475-4932.1987.tb00664.x
Subject(s) - monopolistic competition , economics , profit sharing , wage , indexation , labour economics , profit (economics) , monopoly , microeconomics , macroeconomics , finance , monetary policy
This paper surveys recent developments in the theory of employment and wages and describes a framework for policy analysis which recognizes the existence of monopolistic elements in labour markets. Wages are determined by firm‐union bargains, firms choose the number of jobs, and workers influence the fraction of jobs that is filled through search. The framework is applied to the analysis of the wage and employment effects of indexation, tax‐based incomes policies and profit‐sharing .