The J test for nonnested regression models often works badly as an asypmtotic test, but it generally works very well when bootstrapped. We provide a theroretical analysis of the J test which explains both of these phenomena. We also propose a modified version of the test which works even better...

This paper is an empirical analysis of alternative bargaining theories of wage and employment determination. Using data from manufacturing sectors of the Spanish economy, we find that unions and firms are not myopic and take dynamic considerations into account in the bargaining process.