Economic Growth: The Case of Irreversibility of Investment with Bargaining Power of Workers |
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Authors: | Isabelle Terraz |
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Affiliation: | BETA, Strasbourg, France |
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Abstract: | In this paper, we develop a model of endogenous growth with search frictions in the labor market. We show that the growth rate of the economy may be durably altered in a case of investment irreversibility and bargaining power of workers. Labor market conditions mitigate this rent-seeking effect of workers. |
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Keywords: | Economic growth wage bargaining matching models |
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