A WAGE-BARGAINING MODEL FOR DENMARK

Recent models of wage bargaining provide the background for formulating a wage-employment model which is estimated for the manufacturing sector in Denmark. Emphasis is laid on an interpretation of the empirical findings in a macroeconomic context. The major results are that wage setting is not characterized by money illusion, shorter working hours lead in the long run to full wage compensation and a fall in total number of hours worked, and expansionary demand management policies induce wage increases which eventually eliminate the expansionary effects on activity. © 1991, Taylor & Francis Group, LLC. All rights reserved.