The paper investigates the nexus between labor and financial markets, focusing on the interaction between labor union behavior in setting wages, firms' investment strategy and asset prices. The way unions set wage claims after observing firm's financial performance increases the volatility of...

The paper was originally written in Danish as part of a planned book which found no publisher. Readers of the present abstract who cannot read Danish may find some quotations given in English in the Danish text, so it may be useful to give references to page numbers in that text in the present...