@techreport{NBERw5337,
 title = "Non-Walrasian Unemployment Fluctuations",
 author = "Jordi Gali",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "5337",
 year = "1995",
 month = "November",
 URL = "http://www.nber.org/papers/w5337",
 abstract = {We modify the standard real business cycle model by assuming that wages are set by a monopoly union at the firm level.  In the context of such a model, we introduce a measure of unemployment and analyze its equilibrium behavior.  We show that a calibrated version of the model is capable of generating both a procyclical labor supply and a countercyclical unemployment rate, in a way qualitatively consistent with the evidence.  The model stresses the role of countercyclical markups in the goods market as a key mechanism underlying the countercyclical behavior of unemployment.},
}