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Unionization and Strategic Trade Policy
Author:
Mr. Phillip L Swagel
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Ms. Ling H Tan
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Series:
IMF Working Papers
Volume/Issue:
Volume 2000: Issue 053
Language:
English
Publication Date:
01 Mar 2000
DOI:
https://doi.org/10.5089/9781451847376.001
ISBN:
9781451847376
ISSN:
1018-5941
Pages:
17
Keywords:
WP; labor union
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper examines the effect of unionization on welfare and trade policy in a model of duopolists competing in a third market. It shows that the traditional result that the presence of a union necessitates a stronger strategic trade policy to reach the optimal level of welfare depends on the mode of competition. With Bertrand duopolists, a union can be welfare-improving; it can also lead to a weaker trade policy, or even reverse the direction of the optimal policy. The results highlight the importance for trade policy of understanding the nature of firm behavior and the institutional features of the labor market.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2000: Issue 053