{"title":"Relative Price Changes, Wages and Unemployment in a Specific Factors Model with Search Frictions","authors":"K. Wälde, Pia Weiss","doi":"10.1111/j.1467-9361.2006.00366.x","DOIUrl":null,"url":null,"abstract":"This paper analyzes the effects of changes in the relative product price on wages and unemployment of a small open economy in a specific factors model characterized by search frictions. It shows that unemployment and wages move in opposite directions, i.e., high unemployment is associated with low wages and low unemployment with high wages. The reason for the employment effect is found to be individual wage bargaining.","PeriodicalId":196465,"journal":{"name":"ERN: Wages; Intergenerational Income Distribution (Topic)","volume":"27 1","pages":"0"},"PeriodicalIF":0.0000,"publicationDate":"2006-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"10","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"ERN: Wages; Intergenerational Income Distribution (Topic)","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1111/j.1467-9361.2006.00366.x","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
引用次数: 10
Abstract
This paper analyzes the effects of changes in the relative product price on wages and unemployment of a small open economy in a specific factors model characterized by search frictions. It shows that unemployment and wages move in opposite directions, i.e., high unemployment is associated with low wages and low unemployment with high wages. The reason for the employment effect is found to be individual wage bargaining.