Dynamic Behaviour of a Unionized Solow‐Swan Economy

The impact of union behaviour on the economy has received fresh theoretical attention lately, but virtually all the work to date has been conducted in a comparative static context The research reported in this paper seeks to break new ground in this field by placing the unionized labour market squarely in the framework of a dynamic (Solow‐Swan) growth model The analysis works from first principles, relating the microeconomic decision‐making procedure of an interventionist trade union to the growth of the capital stock, and the intertemporal flavour of the model is enriched by the presence of two‐period‐lived individuals. The precise dynamics of the interaction between union optimization and capital accumulation are unfolded