Lecture 7

Lecture 7 - Unemployment and the Labour Market Lecture #7...

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Unemployment and the labour market Paper 2: Macroeconomics Part IIA Unemployment and the Labour Market Lecture #7 Mauricio Prado jmp200@cam.ac.uk November 6, 2010
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Unemployment and the labour market Paper 2: Macroeconomics Part IIA Today’s outline Hysteresis Wage bargaining and unions Insider-outside model Monopoly model Long-term unemployment Capital scrapping
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Unemployment and the labour market Paper 2: Macroeconomics Part IIA Readings for today’s class Lecture notes. Mankiw’s Chapter 6. Chapter 19 of the book "Macroeconomics and the Wage Bargain", by Carlin and Soskice.
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Unemployment and the labour market Paper 2: Macroeconomics Part IIA Hysteresis Hysteresis is a phenomenon by which a short-term rise in unemployment rates tends to persist. 1. Insider-outside effect 2. Changes to medium-run NAIRU, but still with a unique long-run equilibrium rate of unemployment. 3. From the effect of a fall in aggregate demand on capacity utilization and through this to investment.
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Unemployment and the labour market Paper 2: Macroeconomics Part IIA Wage bargaining and unions I In some countries and/or in some industries, workers are organized in unions and their wages are determined by collective agreement. I Unions influence on unemployment depends upon many factors union power to bargain the fraction of workers covered by collective bargaining the degree of centralization of bargaining the number of insiders I What determines the outcome of bargaining between a union and its employer?
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This note was uploaded on 03/07/2012 for the course ECON 201 taught by Professor Cowell during the Spring '10 term at LSE.

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Lecture 7 - Unemployment and the Labour Market Lecture #7...

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