Macroeconomic policy with a floating exchange-rate and a unionized nontraded sector

Dixon, Huw David ORCID: https://orcid.org/0000-0002-9875-8965 1990. Macroeconomic policy with a floating exchange-rate and a unionized nontraded sector. Economic Journal 100 (400) , pp. 78-90.

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Abstract

This paper considers the effect of a unionized nontraded sector on welfare and policy in an open economy. In equilibrium, there are endogenous wage and price setting, there may be unemployment, and non-Walrasian policy effects. Nominal wages and prices become pegged to the price of tradables. With direct government employment, the multiplier is unity irrespective of financing. With direct government expenditure on nontradables, the multiplier is less than unity. In both cases, an increase in government expenditure reduces welfare.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Subjects:	H Social Sciences > HB Economic Theory
Publisher:	Wiley-Blackwell
Related URLs:	http://huwdixon.org/publication_archive/...
Last Modified:	24 Oct 2022 11:01
URI:	https://orca.cardiff.ac.uk/id/eprint/46667

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