Abstract
This paper sets up an efficient wage–employment bargaining model embodying both styles of closed- and open-shop union in the context of an open economy. The paper's main purpose is to highlight the impacts of a domestic currency devaluation on the labor market and aggregate output. It is found that the effects of currency devaluation, in general, are not unequivocal. Particularly, owing to the influence of the membership effect, its impacts are crucially related to the operation style (closed shop or open shop) of the union.
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