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Is a Conservative Central Banker a (Perfect) Substitute for Wage Coordination?

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  • Nicola Acocella
  • Giovanni Bartolomeo

Abstract

In a monetary union, macroeconomic policies are strongly associated with externalities that imply the need for coordination. However, if coordination is not complete, it might be unable to cope with the externalities. This paper investigates different solutions for internalizing policy externalities. In particular, we compare wage coordination to the conservative central banker solution, which the recent literature has found able to impose wage moderation on labor unions. We also discuss some issues related to labor flexibility reforms as a solution for the unemployment problem. Copyright Kluwer Academic Publishers 2004

(This abstract was borrowed from another version of this item.)

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Bibliographic Info

Article provided by Springer in its journal Empirica.

Volume (Year): 31 (2004)
Issue (Month): 2 (June)
Pages: 281-294

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Handle: RePEc:kap:empiri:v:31:y:2004:i:2:p:281-294

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Web page: http://www.springerlink.com/link.asp?id=100261

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Keywords: Conservative central bank; budget constraints; wage coordination; monetary union;

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  1. Uhlig, Harald, 2002. "One Money, but Many Fiscal Policies in Europe: What Are the Consequences?," CEPR Discussion Papers 3296, C.E.P.R. Discussion Papers.
  2. McCallum, Bennett T & Nelson, Edward, 1999. "An Optimizing IS-LM Specification for Monetary Policy and Business Cycle Analysis," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 31(3), pages 296-316, August.
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