The Welfare Effect of Foreign Monetary Conservatism with Nonatomistic Wage Setters
AbstractThis paper sheds light on the real effects of foreign central bankâs degree of inflation aversion in presence of non-atomistic wage setters. It extends the Lippiâs (2003) framework to an open economy and identifies the key strategic mechanisms between monetary policy and wage-setting decisions so as to assess the real effects of domestic and foreign policy makersâ aversion to inflation. A main finding is that foreign central bankâs aversion to inflation always increases employment. The impact of domestic central bankâs aversion to inflation instead depends on the combination of three strategic effects.
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Bibliographic InfoArticle provided by Blackwell Publishing in its journal Journal of Money, Credit and Banking.
Volume (Year): 43 (2011)
Issue (Month): 8 (December)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-2879
Other versions of this item:
- Vincenzo Cuciniello, 2009. "The welfare effect of foreign monetary conservatism with non-atomistic wage setters," Working Papers 200908, Center for Fiscal Policy, Swiss Federal Institute of Technology Lausanne.
- Vincenzo Cuciniello, 2011. "The welfare effect of foreign monetary conservatism with non-atomistic wage setters," Temi di discussione (Economic working papers) 810, Bank of Italy, Economic Research and International Relations Area.
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
- J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
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