Strategic Monetary Policy with Non-Atomistic Wage-Setters: Some Evidence
AbstractMost monetary policy analyses assume an atomistic private sector, thereby ignoring strategic interactions between policy and wage-setting decisions. Yet, non-atomistic wage-setters are a key feature of several industrialized economies. We study the economic consequences of non-atomistic agents and show that this qualifies previous results on the effects and desirability of conservative central bankers. In particular, the central bank aversion to inflation may have a permanent effect on structural employment, while no such effect emerges with atomistic agents. This prediction is consistent with evidence that unemployment is positively associated with conservatism in countries where wage-setting is non-atomistic but not in the countries where wage setting is decentralized.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2819.
Date of creation: Apr 2001
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- E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
- J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
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- Francesco Lippi, 2003.
"Strategic Monetary Policy with Non-Atomistic Wage Setters,"
Review of Economic Studies,
Oxford University Press, vol. 70(4), pages 909-919.
- Francesco Lippi, 2003. "Strategic Monetary Policy with Non-Atomistic Wage Setters," Review of Economic Studies, Wiley Blackwell, vol. 70(4), pages 909-919, October.
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- Nicola Acocella & Giovanni Di Bartolomeo, 2002.
"Non-neutrality of monetary policy in policy games,"
- Giovanni Di Bartolomeo & Nicola Acocella, 2005. "Non-Neutrality Of Monetary Policy In Policy Games," Macroeconomics 0504026, EconWPA.
- Nicola Acocella & Giovanni Di Bartolomeo, 2002. "Non-neutrality of monetary policy in policy games," Working Papers 49, University of Rome La Sapienza, Department of Public Economics.
- Vincenzo Cuciniello, 2007. "Optimal monetary policy under a floating regime with non-atomistic wage setters," IHEID Working Papers 12-2007, Economics Section, The Graduate Institute of International Studies.
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