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Information Content of Wages and Monetary Policy

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  • HANS GERSBACH
  • VOLKER HAHN

Abstract

We examine whether it is sufficient for central banks to observe and forecast nominal variables only. Analyzing the interplay of wage‐setting unions and a central bank we show that although central banks may not gain more information by directly acquiring data about indicators of real shocks in the economy, such activities are nevertheless beneficial for central banks and yield lower social losses. Moreover, the extent of research activities by central banks should depend on the process of union formation.

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  • Hans Gersbach & Volker Hahn, 2007. "Information Content of Wages and Monetary Policy," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 39(1), pages 133-149, February.
    • Handle: RePEc:wly:jmoncb:v:39:y:2007:i:1:p:133-149
    DOI: 10.1111/j.0022-2879.2007.00006.x
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    Cited by:

    1. Volker Hahn, 2009. "Why the Publication of Socially Harmful Information May Be Socially Desirable," CER-ETH Economics working paper series 09/122, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    2. Hahn, Volker, 2014. "Transparency In Monetary Policy, Signaling, And Heterogeneous Information," Macroeconomic Dynamics, Cambridge University Press, vol. 18(2), pages 369-394, March.

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