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PUBLIC AND PRIVATE SECTOR WAGES 2009 INTERACTIONS IN A GENERAL EQUILIBRIUM MODEL Gonzalo Fernández-de-Córdoba, Javier J. Pérez and José L. Torres Documentos de Trabajo N.º 0924 PUBLIC AND PRIVATE SECTOR WAGES INTERACTIONS IN A GENERAL EQUILIBRIUM MODEL PUBLIC AND PRIVATE SECTOR WAGES INTERACTIONS IN A GENERAL EQUILIBRIUM MODEL (*) Gonzalo Fernández-de-Córdoba UNIVERSIDAD DE SALAMANCA Javier J. Pérez BANCO DE ESPAÑA José L. Torres UNIVERSIDAD DE MÁLAGA (*) The views expressed in this paper are the authors’ and do not necessarily reflect those of the European Central Bank, the Bank of Spain or the Eurosystem. Fernández de Córdoba and Torres thank the hospitality of the Fiscal Policies Division of the European Central Bank. We also thank M. J. Gutiérrez, L. Ljungqvist, M. Ljungqvist, D. Martínez, J. Rodríguez, T. van Rens, A. van Riet, participants in seminars at the European Central Bank, the University of Málaga, the University Pablo de Olavide, the University of Santiago de Chile, the II workshop ‘‘Advances in the analysis of labor markets with frictions”, and the Editorial Board of the ECB Working Paper Series for helpful comments and suggestions. The authors acknowledge financial support from Proyecto de Excelencia Junta de Andalucía P07-SEJ-02479. Fernández de Córdoba acknowledges financial support from the Research Grant SA091/02 from Junta de Castilla y León. Documentos de Trabajo. N.º 0924 2009 The Working Paper Series seeks to disseminate original research in economics and fi nance. All papers have been anonymously refereed. By publishing these papers, the Banco de España aims to contribute to economic analysis and, in particular, to knowledge of the Spanish economy and its international environment. The opinions and analyses in the Working Paper Series are the responsibility of the authors and, therefore, do not necessarily coincide with those of the Banco