Centralized Wage Setting and Monetary Policy in a Reputational Equilibrium
AbstractThis paper analyzes a repeated game between the central bank and a centralized trade union. The central bank would be better off if it could commit to a noninflationary strategy. When this commitment is not enforceable, a noninflationary equilibrium can still be sustained by a reputational mechanism if the central bank has superior information about its own objective function. The qualitative properties of this reputational equilibrium are shown to differ from the cases considered in the existing literature where the central bank was modeled as playing a game against competitive labor markets. Copyright 1988 by Ohio State University Press.
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Bibliographic InfoArticle provided by Blackwell Publishing in its journal Journal of Money, Credit and Banking.
Volume (Year): 20 (1988)
Issue (Month): 1 (February)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-2879
Other versions of this item:
- Guido Tabellini, 1985. "Centralized Wage Setting and Monetary Policy in a Reputational Equilibrium," UCLA Economics Working Papers 369, UCLA Department of Economics.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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