The welfare effect of foreign monetary conservatism with non-atomistic wage setters
AbstractThis paper extends the closed economy analysis of strategic interaction between labor unions and the monetary authority in Lippi (REStud 2003) to a two-country open economy framework. It sheds light on the real effect of foreign central bank conservatism, whichÂ—through a strategic mechanism that operates via the terms of trade between the two independent monetary policy makersÂ—entails wage moderation. The impact of domestic central bank conservatism hinges instead on the combination of three strategic effects.
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Bibliographic InfoPaper provided by Bank of Italy, Economic Research and International Relations Area in its series Temi di discussione (Economic working papers) with number 810.
Date of creation: Jun 2011
Date of revision:
foreign central bank conservatism; centralized wage setting; open-economy macro;
Other versions of this item:
- Vincenzo Cuciniello, 2011. "The Welfare Effect of Foreign Monetary Conservatism with Nonatomistic Wage Setters," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 43(8), pages 1719-1734, December.
- 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.
- 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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