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Central Bank Independence, Wage-Bargaining Structure, and Macroeconomic Performance in OECD Countries

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  • Bleaney, Michael

Abstract

The impact of central bank independence and wage-bargaining structure on inflation and unemployment is explored theoretically and tested empirically for a sample of seventeen OECD countries over two separate periods. The results suggest that inflation is lower in economies with greater central bank independence and that the equilibrium unemployment rate depends on the structure of the labor market. Greater central bank independence does not appear to be associated with higher unemployment. Copyright 1996 by Royal Economic Society.

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  • Bleaney, Michael, 1996. "Central Bank Independence, Wage-Bargaining Structure, and Macroeconomic Performance in OECD Countries," Oxford Economic Papers, Oxford University Press, vol. 48(1), pages 20-38, January.
  • Handle: RePEc:oup:oxecpp:v:48:y:1996:i:1:p:20-38
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    Cited by:

    1. Leybourne, Stephen J. & Mizen, Paul, 1999. "Understanding the disinflations in Australia, Canada and New Zealand using evidence from smooth transition analysis," Journal of International Money and Finance, Elsevier, vol. 18(5), pages 799-816, October.
    2. Aidt, T.S. & Tzannatos, Z., 2005. "The Cost and Benefits of Collective Bargaining," Cambridge Working Papers in Economics 0541, Faculty of Economics, University of Cambridge.
    3. Andres Velasco & Vincenzo Guzzo, 1998. "The Case for a Populist Banker," NBER Working Papers 6802, National Bureau of Economic Research, Inc.
    4. John Driffill, 2006. "The Centralization of Wage Bargaining Revisited: What Have we Learnt?," Journal of Common Market Studies, Wiley Blackwell, vol. 44, pages 731-756, November.
    5. Guzzo, Vincenzo & Velasco, Andres, 1999. "The case for a populist Central Banker," European Economic Review, Elsevier, vol. 43(7), pages 1317-1344, June.
    6. Athina Zervoyianni & Athanasios Anastasiou & Andreas Anastasiou, 2014. "Does central bank independence really matter? Re-assessing the role of the independence of monetary policy-makers in macroeconomic outcomes," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 8(4), pages 427-473.
    7. Acocella, Nicola & Di Bartolomeo, Giovanni & Hibbs Jr., Douglas A., 2008. "Labor market regimes and the effects of monetary policy," Journal of Macroeconomics, Elsevier, pages 134-156.
    8. Riccardo De Bonis & Massimiliano Stacchini, 2009. "What determines the size of bank loans in industrialized countries? The role of government debt," Temi di discussione (Economic working papers) 707, Bank of Italy, Economic Research and International Relations Area.
    9. Lawler, Phillip, 2002. "Monetary uncertainty, strategic wage setting and equilibrium employment," Economics Letters, Elsevier, vol. 77(1), pages 35-40, September.
    10. Agiomirgianakis, George & Zervoyianni, Athina, 2001. "Globalization of labor markets and macroeconomic equilibrium," International Review of Economics & Finance, Elsevier, vol. 10(2), pages 109-133.
    11. Christoph S. Weber, 2017. "The Unemployment Effect of Central Bank Transparency," Working Papers 172, Bavarian Graduate Program in Economics (BGPE).
    12. Nicola Acocella & Giovanni Di Bartolomeo, 2003. "Wage and Public Expenditure Setting in a Monetary Union," Zagreb International Review of Economics and Business, Faculty of Economics and Business, University of Zagreb, vol. 6(1-2), pages 1-16, May - Nov.
    13. Cukierman, Alex & Lippi, Francesco, 1999. "Central bank independence, centralization of wage bargaining, inflation and unemployment:: Theory and some evidence," European Economic Review, Elsevier, vol. 43(7), pages 1395-1434, June.
    14. FA Al-Marhubi, 2000. "Income inequality and inflation: the cross-country evidence," Contemporary Economic Policy, Western Economic Association International, vol. 18(4), pages 428-439, October.
    15. Giuseppe Mastromatteo & Lorenzo Esposito, 2015. "The Two Approaches to Money: Debt, Central Banks, and Functional Finance," Economics Working Paper Archive wp_855, Levy Economics Institute.
    16. Hall, Peter A. & Franzese, Robert J., 1997. "Mixed signals: central bank independence, coordinated wage bargaining, and European Monetary Union," Discussion Papers, Research Unit: Economic Change and Employment FS I 97-307, Social Science Research Center Berlin (WZB).

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