IDEAS home Printed from
MyIDEAS: Login to save this article or follow this journal

Wage Indexation, Inflation Inertia, and the Cost of Disinflation

  • Javier Gómez.


Registered author(s):

    What are the consequences of wage negotiations on monetary policy in acountry that is in transition to lower inflation? We show that wageindexation to expected inflation, increased central bank credibility and ahigher frequency of wage adjustments can increase the effect of monetarypolicy and can decrease the cost of disinflation. Important welfare gainscan be obtained with the best possible performance in the pursuit ofinflation targets and with the highest possible precision in inflationforecasts since these actions increase central bank credibility. Wage policieslike the one proposed by the Colombian Constitutional Court can haveimportant negative consequences on output and real wages.

    If 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.

    File URL:
    Download Restriction: no


    Volume (Year): (2003)
    Issue (Month): ()

    in new window

    Handle: RePEc:col:000107:005297
    Contact details of provider:

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:col:000107:005297. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Espe)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.