Abstract

This paper examines the effects of the segmentation of the labour and goods
markets over the dispersion of relative prices and wages in the Brazilian economy. The
theoretical argument is based on the behaviour of firms in the oligopolist and competitive
sectors of the economy, on the one hand, and the behaviour of organized and non-organized
labour, on the other. We suggest that the negotiations between oligopolist firms and organized
labour can be seen as a positive-sum game; whereas a zero-sum game characterizes the
distribution of income in the economy as a whole. Hence, we conclude that there has been
a redistribution of income in favour of profits and wages of those agents operating in the
oligopolist sectors, in detriment of the other agents in the economy.

JEL Classification: R12; R11.