Does Inflation Targeting Matter for Labour Markets? – Some Empirical Evidence
AbstractThis paper investigates the impact of inflation targeting on wage formation and unemployment using a panel of 17 OECD countries 1972-2000. Five of the countries included in the study have combined floating exchange rates with explicit inflation targets during the 1990s. Using a theoretical framework for a small open economy, we present simulation results and empirical tests of the model using two different methods. There is some weak evidence that inflation targeting matters for labour markets.
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Bibliographic InfoPaper provided by Trade Union Institute for Economic Research in its series Working Paper Series with number 191.
Length: 38 pages
Date of creation: 17 Sep 2003
Date of revision:
Wage bargaining; Monetary regime; Equilibrium (un)employment; Inflation target; Exchange rate target;
Find related papers by JEL classification:
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-11-03 (All new papers)
- NEP-IFN-2003-11-03 (International Finance)
- NEP-MAC-2003-11-03 (Macroeconomics)
- NEP-MFD-2003-11-03 (Microfinance)
- NEP-MON-2003-11-03 (Monetary Economics)
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