Union power, minimum wage legislation endogenous labor supplies and production

The objective of this work is to study the impact of the unions' bargaining power on production and wages. We present a model where a competitive final good is produced through two substitutable intermediate goods, one produced by unskilled labor and the other by skilled labor. Potential workers decide at their cost to become skilled or unskilled and, thus, labor supplies are determined endogenously. We find that the reallocation of the labor supplies due to changes in the unskilled (or skilled) unions¿ bargaining power may have a positive impact on the final goods production. At the same time, total labor earnings increase with the unskilled unions¿ bargaining power if the final goods production increases too. We also show that the minimum wage legislation has efects similar to an increase in the bargaining power of the unskilled unions.

Union power, minimum wage legislation endogenous labor supplies and production

The objective of this work is to study the impact of the unions' bargaining power on production and wages. We present a model where a competitive final good is produced through two substitutable intermediate goods, one produced by unskilled labor and the other by skilled labor. Potential workers decide at their cost to become skilled or unskilled and, thus, labor supplies are determined endogenously. We find that the reallocation of the labor supplies due to changes in the unskilled (or skilled) unions¿ bargaining power may have a positive impact on the final goods production. At the same time, total labor earnings increase with the unskilled unions¿ bargaining power if the final goods production increases too. We also show that the minimum wage legislation has efects similar to an increase in the bargaining power of the unskilled unions.

How political parties, rather than member-states, are building the European Union

Political party formation and coalition building in the European Parliament is being a driving force for making governance of the highly pluralistic European Union relatively effective and consensual. In spite of successive enlargements and the very high number of electoral partiesobtaining representation in the European Union institutions, the number of effective European Political Groups in the European Parliament has decreased from the first direct election in 1979 to the fifth in 1999. The formal analysis of national party¹s voting power in different Europeanparty configurations can explain the incentives for national parties to join large European Political Groups instead of forming smaller nationalistic groupings. Empirical evidence shows increasing cohesion of European Political Groups and an increasing role of the European Parliament in EU inter-institutional decision making. As a consequence of this evolution, intergovernmentalism is being replaced with federalizing relations. The analysis can support positive expectations regarding the governability of the European Union after further enlargements provided that new member states have party systems fitting the European PoliticalGroups.

Disentangling water usage in the European Union: A decomposition analysis

The Water Framework Directive (WFD) defines common objectives for water resources throughout the European Union (EU). Given this general approach to water preservation and water policy, the objective of this paper is to analyse whether common patterns of water consumption exist within Europe. In particular, our study uses two methods to reveal the reasons behind sectoral water use in all EU countries. The first method is based on an accounting indicator that calculates the water intensity of an economy as the sum of sectoral water intensities. The second method is a subsystem input‐output model that divides total water use into different income channels within the production system. The application uses data for the years 2005 and 2009 on water consumption in the production system of the 27 countries of the EU. From our analysis it emerges that EU countries are characterized by very different patterns of water consumption. In particular water consumption by the agriculture sector is extremely high in Central/Eastern Europe, relative to the rest of Europe. In most countries, the water used by the fuel, power and water sector is consumed to satisfy domestic final demand. However, our analysis shows that for some countries exports from this sector are an important driver of water consumption. Focusing on the agricultural sector, the decomposition analysis suggests that water usage in Mediterranean countries is mainly driven by final demand for, and exports of, agricultural products. In Central/Eastern Europe domestic final demand is the main driver of water consumption, but in this region the proportion of water use driven by demand for exports is increasing over time. Given these heterogeneous water consumption patterns, our analysis suggests that Mediterranean and Central/Eastern European countries should adopt specific water policies in order to achieve efficient levels of water consumption in the European Union. JEL codes: N5; C67 Keywords: Water use, Subsystem input–output model; Water intensity, European Union.

Should fiscal authorities cooperate in a monetary union with public deficit targets?

In this paper we analyse the setting of optimal policies in a monetary union with one monetary authority and various fiscal authorities that have a public deficit target. We will show that fiscal cooperation among the fiscal authorities, in the presence of positive supply shocks, ends up producing higher public deficits than in a non-cooperative regime. JEL No. E61, E63, F33, H0. Keywords: monetary union, fiscal policy coordination.

On the weights of nations: assigning voting weights in a heterogenous union

Consider a voting procedure where countries, states, or districts comprising a union each elect representatives who then participate in later votes at the union level on their behalf. The countries, provinces, and states may vary in their populations and composition. If we wish to maximize the total expected utility of all agents in the union, how to weight the votes of the representatives of the different countries, states or districts at the union level? We provide a simple characterization of the efficient voting rule in terms of the weights assigned to different districts and the voting threshold (how large a qualified majority is needed to induce change versus the status quo). Next, in the context of a model of the correlation structure of agents preferences, we analyze how voting weights relate to the population size of a country. We then analyze the voting weights in Council of the European Union under the Nice Treaty and the recently proposed constitution, and contrast them under different versions of our model.

Countervailing power? Collusion in markets with decentralized trade

We consider the collective incentives of buyers and sellers to form cartels in markets where trade is realized through decentralized pairwise bargaining. Cartels are coalitions of buyers or sellers that limit market participation and compensate inactive members for abstaining from trade. In a stable market outcome, cartels set Nash equilibrium quantities and cartel memberships are immune to defections. We prove that the set of stable market outcomes is non-empty and we provide its full characterization. Stable market outcomes are of two types: (i) at least one cartel actively restrains trade and the levels of market participation are balanced, or (ii) only one cartel, eventually the cartel that forms on the long side of the market, is active and it reduces trade slightly below the opponent's.

I want you! An experiment studying the selection effect when assigning distributive power.

We study whether selection affects motivation. In our experiment subjects first answer a personality questionnaire. They then play a 3-person game. One of the three players decides between an outside option assigning him a positive amount, but leaving the two others empty-handed and allowing one of the other two players to distribute a pie. Treatments differ in the procedure by which distributive power is assigned: to a randomly determined or to a knowingly selected partner. Before making her decision the selecting player could consult the personality questionnaire of the other two players. Results show that knowingly selected players keep less for themselves than randomly selected ones and reward the selecting player more generously.

Demand elasticity and market power in the spanish electricity market

In this paper we check whether generator's bid behavior at the Spanish whosale electricity market is consistent with the hypothesis of profit maximization on their residual demands. Using OMEL data, we find the arc-elacticity of the residual demand around the system marginal price. The results suggest thet the larger firms are not actually profit-msximization. We argue how the regulatory environment may drive these results. Finally, we repeat the analysis for the first session of the intra-day market where presumably firms may not have the same incentives as in the day-ahead market.

Two algorithms to find a power integral basis

"Vegeu el resum a l'inici del fitxer adjunt."

An instrumental analysis of the European Union's capability to act in conflict response

Descripció i anàlisi dels instruments polítics, econòmics, civils i militars de la Unió Europea per enfrontar qualsevol conflicte.