Monetary strictness and labour market outcomes under incomplete transparency
This paper extends the workhorse model of strategic wage setting and monetary policy to the case of incomplete central bank transparency. In contrast with the existing literature, the paper shows that an increase in the degree of monetary strictness may lead to a simultaneous rise in real wages and unemployment. This is the likely outcome when the central bank's policies are perceived to be rather accommodating and unpredictable. When monetary policy is instead conducted in a conservative and transparent fashion, we obtain the standard result that greater monetary strictness induces wage discipline and lower unemployment.
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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
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.:
- Cukierman, Alex, 2007.
"The Limits of Transparency,"
CEPR Discussion Papers
6475, C.E.P.R. Discussion Papers.
- Acocella, Nicola & Di Bartolomeo, Giovanni & Hibbs Jr., Douglas A., 2008.
"Labor market regimes and the effects of monetary policy,"
Journal of Macroeconomics,
Elsevier, vol. 30(1), pages 134-156, March.
- Acocella, Nicola & Di Bartolomeo, Giovanni & Hibbs Jr., Douglas A., 2004. "Labor market regimes and the effects of monetary policy," Working Papers in Economics 145, University of Gothenburg, Department of Economics, revised 22 Apr 2005.
- Gruner, Hans Peter, 2002. "How much should central banks talk?: A new argument," Economics Letters, Elsevier, vol. 77(2), pages 195-198, October.
- Holden,S., 2000.
"Monetary regime and the co-ordination of wage setting,"
01/2000, 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.
- Fabrizio Coricelli & Alex Cukierman & Alberto Dalmazzo, 2006.
"Monetary Institutions, Monopolistic Competition, Unionized Labor Markets and Economic Performance,"
Scandinavian Journal of Economics,
Wiley Blackwell, vol. 108(1), pages 39-63, 03.
- Coricelli, Fabrizio & Cukierman, Alex & Dalmazzo, Alberto, 2000. "Monetary Institutions, Monopolistic Competition, Unionized Labour Markets And Economic Performance," CEPR Discussion Papers 2407, C.E.P.R. Discussion Papers.
- Grüner, Hans Peter & Hayo, Bernd & Hefeker, Carsten, 2005.
"Unions, wage setting and monetary policy uncertainty,"
Working Paper Series
0490, European Central Bank.
- Gruener Hans Peter & Hayo Bernd & Hefeker Carsten, 2009. "Unions, Wage Setting and Monetary Policy Uncertainty," The B.E. Journal of Macroeconomics, De Gruyter, vol. 9(1), pages 1-25, October.
- David Soskice & Torben Iversen, 2000. "The Nonneutrality of Monetary Policy with Large Price or Wage Setters," The Quarterly Journal of Economics, Oxford University Press, vol. 115(1), pages 265-284.
- S[empty]rensen, Jan Rose, 1991. "Political uncertainty and macroeconomic performance," Economics Letters, Elsevier, vol. 37(4), pages 377-381, December.
- Dai, Meixing & Sidiropoulos, Moïse, 2008. "Central bank's conservativeness and transparency," Research in Economics, Elsevier, vol. 62(4), pages 179-187, December.
- Spyromitros, Eleftherios & Zimmer, Blandine, 2009.
"Monetary accommodation and unemployment: Why central bank transparency matters,"
Elsevier, vol. 102(2), pages 119-121, February.
- Eleftherios Spyromitros & Blandine Zimmer, 2007. "Monetary accommodation and unemployment: Why central bank transparency matters," Working Papers of BETA 2007-27, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
When requesting a correction, please mention this item's handle: RePEc:eee:reecon:v:65:y:2011:i:2:p:95-99. 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: (Shamier, Wendy)
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.