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Relative Prices in Monetary Union and Floating

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  • Vartiainen, Juhana
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    Abstract

    The setting is a small open economy with an open sector and a sheltered sector. If the unions that operate in each sector coordinate their wage claims within the sector, the choice of monetary regime--monetary union or floating with an inflation target--affects the relative prices of tradables and non-tradables as well as real wages and employment. EMU membership results in lower prices of tradable goods and lower relative wages in the open sector, while opposite results hold for sheltered sector prices and wages. Copyright 2002 by The editors of the Scandinavian Journal of Economics.

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    Article provided by Wiley Blackwell in its journal Scandinavian Journal of Economics.

    Volume (Year): 104 (2002)
    Issue (Month): 2 (June)
    Pages: 277-87

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    Handle: RePEc:bla:scandj:v:104:y:2002:i:2:p:277-87

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    Web page: http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1467-9442

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    Cited by:
    1. Kreickemeier, Udo & Meland, Frode, 2011. "International Trade, Union Wage Premia,and Welfare in General Equilibrium," Working Papers in Economics 04/11, University of Bergen, Department of Economics.
    2. Larsson, Anna, 2011. "On labour mobility and the neutrality of money in unionised economies," Economic Modelling, Elsevier, vol. 28(1), pages 396-403.
    3. Lars Calmfors & Anna Larsson Seim, 2013. "Pattern Bargaining and Wage Leadership in a Small Open Economy," Scandinavian Journal of Economics, Wiley Blackwell, vol. 115(1), pages 109-140, 01.
    4. Larsson, Anna, 2006. "Monetary Regimes, Labour Mobility and Equilibrium Employment," Seminar Papers 745, Stockholm University, Institute for International Economic Studies.

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