In this paper we conduct a theoretical analysis of the implications of a union which can exploit the existence of firm labour adjustment costs. We consider a model involving a large number of identical firms facing a single, economy-wide union. We solve (i) for the Markov perfect equilibria with...

In this paper the evolution of skill imbalances in the UK labor market over the past two decades is investigated. Movements in the relative ease with which firms can recruit skilled workers can affect unemployment, inflation, and productivity. Any assessment of changes in the skill balance is...

Labour market tightness is a phrase often used by commentators and policy-makers, but it is rarely defined. In this paper, the phrase 'labour market tightness' is interpreted as describing the balance between the demand for, and the supply of, labour. A logical consequence of this approach is...

In models recently published by several influential macroeconomic theorists, rigidity in the real wages that firms pay newly hired workers plays a crucial role in generating realistically large cyclical fluctuations in unemployment. There is remarkably little evidence, however, on whether...

In models recently published by several influential macroeconomic theorists, rigidity in the real wages that firms pay newly hired workers plays a crucial role in generating realistically large cyclical fluctuations in unemployment. There is remarkably little evidence, however, on whether...