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.
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.:
- 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.
- 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.
- 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.
- Dai, Meixing & Sidiropoulos, Moïse, 2008. "Central bank's conservativeness and transparency," Research in Economics, Elsevier, vol. 62(4), pages 179-187, December.
- 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.
- Grüner, Hans Peter & Hayo, Bernd & Hefeker, Carsten, 2005. "Unions, wage setting and monetary policy uncertainty," Working Paper Series 0490, European Central Bank.
- Cukierman, Alex, 2007.
"The Limits of Transparency,"
CEPR Discussion Papers
6475, C.E.P.R. Discussion Papers.
- 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.
- 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.
- Gruner, Hans Peter, 2002. "How much should central banks talk?: A new argument," Economics Letters, Elsevier, vol. 77(2), pages 195-198, October.
- 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.
- 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.
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: (Dana Niculescu)
If references are entirely missing, you can add them using this form.