This paper lays out a simple open economy macromodel based on the recent literature on imperfect competition and equilibrium unemployment.

Using a set of panel data for manufacturing plants we study how payrll taxes and investment subsidies affect wages and demand for labor and capital. We exploit changes in the regional subsidy schemes for labor anf capital in Norway. Our empirical analysis finds that a large part of changes in...

We construct a model integrating the efficiency wage model of Shapiro-Stiglitz (1984) with the matching-bargaining models of Diamond, Mortensen and Pissarides (DMP). Firms and workers form pairwise matches, workers may shirk on the job, and the wage is set in an asymmetric Nash bargain over the...

We study the effects of mobility costs in a model of wage bargaining between workers and firms, where there is instantaneous matching, free firm entry, heterogeneous labour, and workers' individual productivities are discovered by firms only after being hired. We derive the employment level and...

We investigate the effects of wage compression through centralized collective bargaining when growth depends on the continual reallocation of labor from older, less productive plants to new, more productive plants.

Using panel data for the Norwegian manufacturing, we revisit " the increasing returns to scale puzzle" for labour input. We consider the response of the input of white collar workers, blue collar workers, and blue collar worker hours to permanent changes in output. Permanent and temporary...

We introduce strategic wage bargaining in a search equilibrium model. We find that wages respond more an employment and output less to aggreagte shoks than when wages are determined by conventional Nash bargaining. Expectations about the stocks increase the volatility of wages even more.