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Non-Walrasian Unemployment Fluctuations / Jordi Gali.
- Format:
- Book
- Author/Creator:
- Gali, Jordi.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w5337.
- NBER working paper series no. w5337
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 1995.
- Summary:
- We modify the standard real business cycle model by assuming that wages are set by a monopoly union at the firm level. In the context of such a model, we introduce a measure of unemployment and analyze its equilibrium behavior. We show that a calibrated version of the model is capable of generating both a procyclical labor supply and a countercyclical unemployment rate, in a way qualitatively consistent with the evidence. The model stresses the role of countercyclical markups in the goods market as a key mechanism underlying the countercyclical behavior of unemployment.
- Notes:
- Print version record
- November 1995.
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