Relative Wages in Monetary Union and Floating
AbstractWe analyse a small open economy with a tradable and a sheltered sector. If the unions that operate in each sector coordinate their wage demands sectorwise, the choice of monetary regime - floating cum inflation target vs EMU - may affect the relative wages and prices of the economy. We show that EMU results in lower prices for tradable goods and lower real wages in the traded sector while opposite results hold for sheltered sector prices and wages. Thus, if large unions behave strategically, the choice of monetary regime has far-reaching structural implications.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Trade Union Institute for Economic Research in its series Working Paper Series with number 155.
Length: 20 pages
Date of creation: 04 Nov 1999
Date of revision:
Publication status: Published in Scandinavian Journal of Economics, 2002, pages 277-287.
Trade unions; Wage bargaining; EMU; Monetary policy;
Find related papers by JEL classification:
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
This paper has been announced in the following NEP Reports:
- NEP-ALL-2000-02-28 (All new papers)
- NEP-IFN-2000-02-28 (International Finance)
- NEP-LAB-2000-02-28 (Labour 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.:
- Steinar Holden, 2003.
"Wage-setting under Different Monetary Regimes,"
London School of Economics and Political Science, vol. 70(278), pages 251-265, 05.
- Rama, Martin, 1994. "Bargaining structure and economic performance in the open economy," European Economic Review, Elsevier, vol. 38(2), pages 403-415, February.
- Holden,S., 1999.
"Wage setting under different monetary regimes,"
12/1999, Oslo University, Department of Economics.
- Holden, Steinar, 2005.
"Monetary regimes and the co-ordination of wage setting,"
European Economic Review,
Elsevier, vol. 49(4), pages 833-843, May.
- Steinar Holden, 2001. "Monetary Regimes and the Co-Ordination of Wage Setting," CESifo Working Paper Series 429, CESifo Group Munich.
- Holden,S., 2000. "Monetary regime and the co-ordination of wage setting," Memorandum 01/2000, Oslo University, Department of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sune Karlsson).
If references are entirely missing, you can add them using this form.