The setting is a small open economy with an open sector and a sheltered sector. If the unions that operate in each sector coordinate their wage claims within the sector, the choice of monetary regime - monetary union or floating with an inflation target - affects the relative prices of tradables...

This paper studies how changes in the complexity of the firms' production technologies affect wage differences between and within tasks. In a production process where tasks are complementary, the employer may have an incentive to pay higher wages when using more complex technologies because the...