Effect of Reduced Labour Market Power on WS-PS Curves and Income Distribution
A decrease in firms' labor market power (monopsony power) causes both the wage-setting (WS) and price-setting (PS) curves to shift upward. The upward shift in the PS curve is particularly significant as it results from a smaller markdown on prices. This leads to a higher real wage and a redistribution of income from the firm's owners to its workers.
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Introduction to Macroeconomics Course
Ch.1 The supply side of the macroeconomy: Unemployment and real wages - The Economy 2.0 Macroeconomics @ CORE Econ
The Economy 2.0 Macroeconomics @ CORE Econ
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Ch.2 Unemployment, wages, and inequality: Supply-side policies and institutions - The Economy 2.0 Macroeconomics @ CORE Econ
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