IDEAS home Printed from https://ideas.repec.org/h/chb/bcchsb/v02c02pp019-064.html
   My bibliography  Save this book chapter

Causes and Consequences of Indexation: A Review of the Literature

In: Indexation, Inflation and Monetary Policy

Author

Listed:
  • Oscar Landerretche

    (Universidad de Chile)

  • Fernando Lefort

    (Pontificia Universidad Católica de Chile)

  • Rodrigo O. Valdés

    (International Monetary Fund)

Abstract

No abstract is available for this item.

Suggested Citation

  • Oscar Landerretche & Fernando Lefort & Rodrigo O. Valdés, 2002. "Causes and Consequences of Indexation: A Review of the Literature," Central Banking, Analysis, and Economic Policies Book Series, in: Fernando Lefort & Klaus Schmidt-Hebbel & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Serie (ed.),Indexation, Inflation and Monetary Policy, edition 1, volume 2, chapter 2, pages 019-064, Central Bank of Chile.
    • Handle: RePEc:chb:bcchsb:v02c02pp019-064
    as

    Download full text from publisher

    File URL: https://si2.bcentral.cl/public/pdf/banca-central/pdf/v2/019_064Lander.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. McNelis, Paul D., 1987. "Indexing, exchange rate policy and inflationary feedback effects in Latin America," World Development, Elsevier, vol. 15(8), pages 1107-1117, August.
    2. Wallace, Neil, 1981. "A Modigliani-Miller Theorem for Open-Market Operations," American Economic Review, American Economic Association, vol. 71(3), pages 267-274, June.
    3. Barro, Robert J & Gordon, David B, 1983. "A Positive Theory of Monetary Policy in a Natural Rate Model," Journal of Political Economy, University of Chicago Press, vol. 91(4), pages 589-610, August.
    4. International Monetary Fund, 1994. "Monetary Transmission and Financial Indexation: Evidence from the Chilean Economy," IMF Policy Discussion Papers 1994/017, International Monetary Fund.
    5. Bruno, Michael, 1993. "Crisis, Stabilization, and Economic Reform: Therapy by Consensus," OUP Catalogue, Oxford University Press, number 9780198286639.
    6. Karni, Edi, 1983. "On Optimal Wage Indexation," Journal of Political Economy, University of Chicago Press, vol. 91(2), pages 282-292, April.
    7. Lucas, Robert Jr. & Stokey, Nancy L., 1983. "Optimal fiscal and monetary policy in an economy without capital," Journal of Monetary Economics, Elsevier, vol. 12(1), pages 55-93.
    8. Robert G. King & Ross Levine, 1993. "Finance and Growth: Schumpeter Might Be Right," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(3), pages 717-737.
    9. Dornbusch, Rudiger & Reynoso, Alejandro, 1989. "Financial Factors in Economic Development," American Economic Review, American Economic Association, vol. 79(2), pages 204-209, May.
    10. Cukierman, Alex, 1980. "The effects of wage indexation on macroeconomic fluctuations : A generalization," Journal of Monetary Economics, Elsevier, vol. 6(2), pages 147-170, April.
    11. Kovanen, Arto, 1992. "The heterogeneity of labor, wage indexation and welfare," European Economic Review, Elsevier, vol. 36(1), pages 37-49, January.
    12. Pablo E. Guidotti, 1993. "Wage and Public Debt Indexation," IMF Staff Papers, Palgrave Macmillan, vol. 40(2), pages 237-265, June.
    13. Bonomo, Marco & Garcia, Rene, 1994. "Indexation, staggering and disinflation," Journal of Development Economics, Elsevier, vol. 43(1), pages 39-58, February.
    14. Dornbusch, Rudiger, 1976. "Expectations and Exchange Rate Dynamics," Journal of Political Economy, University of Chicago Press, vol. 84(6), pages 1161-1176, December.
    15. Aizenman, Joshua & Frenkel, Jacob A, 1985. "Optimal Wage Indexation, Foreign Exchange Intervention, and Monetary Policy," American Economic Review, American Economic Association, vol. 75(3), pages 402-423, June.
    16. Gray, Jo Anna, 1976. "Wage indexation: A macroeconomic approach," Journal of Monetary Economics, Elsevier, vol. 2(2), pages 221-235, April.
    17. Mourmouras, Iannis A., 1993. "Time consistency, indexation and the costs of inflation," Economics Letters, Elsevier, vol. 42(4), pages 361-365.
    18. Devereux, Michael, 1988. "The Optimal Mix of Wage Indexation and Foreign Exchange Market Intervention," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 20(3), pages 381-392, August.
    19. Douglas W. Diamond & Philip H. Dybvig, 2000. "Bank runs, deposit insurance, and liquidity," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 24(Win), pages 14-23.
    20. Crosby, Mark, 1995. " Wage Indexation and the Time Consistency of Government Policy," Scandinavian Journal of Economics, Wiley Blackwell, vol. 97(1), pages 105-112, March.
    21. Calvo, Guillermo A, 1988. "Servicing the Public Debt: The Role of Expectations," American Economic Review, American Economic Association, vol. 78(4), pages 647-661, September.
    22. Pissarides, Christopher A, 1988. "The Search Equilibrium Approach to Fluctuations in Employment," American Economic Review, American Economic Association, vol. 78(2), pages 363-368, May.
    23. Sebastian Edwards, 1996. "A Tale of Two Crises: Chile and Mexico," NBER Working Papers 5794, National Bureau of Economic Research, Inc.
    24. Joshua Aizenman, 1984. "Optimal Wage Re-Negotiation," NBER Working Papers 1279, National Bureau of Economic Research, Inc.
    25. Van Gompel, J, 1994. "Stabilization with Wage Indexation and Exchange Rate Flexibility," Journal of Economic Surveys, Wiley Blackwell, vol. 8(3), pages 251-281, September.
    26. Aizenman, Joshua, 1984. "Optimal wage re-negotiation in a closed and open economy," Journal of Monetary Economics, Elsevier, vol. 13(2), pages 251-262, March.
    27. Deaton, Angus, 1992. "Understanding Consumption," OUP Catalogue, Oxford University Press, number 9780198288244.
    28. Bohn, Henning, 1990. "Tax Smoothing with Financial Instruments," American Economic Review, American Economic Association, vol. 80(5), pages 1217-1230, December.
    29. Shavell, Steven, 1976. "Sharing Risks of Deferred Payment," Journal of Political Economy, University of Chicago Press, vol. 84(1), pages 161-168, February.
    30. Bertola, Giuseppe & Caballero, Ricardo J, 1992. "Target Zones and Realignments," American Economic Review, American Economic Association, vol. 82(3), pages 520-536, June.
    31. Martin Neil Baily, 1974. "Wages and Employment under Uncertain Demand," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 41(1), pages 37-50.
    32. Bohn, Henning, 1988. "Why do we have nominal government debt?," Journal of Monetary Economics, Elsevier, vol. 21(1), pages 127-140, January.
    33. Ball, Laurence, 1994. "Credible Disinflation with Staggered Price-Setting," American Economic Review, American Economic Association, vol. 84(1), pages 282-289, March.
    34. Milesi-Ferretti, Gian Maria, 1994. "Wage Indexation and Time Consistency," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 26(4), pages 941-950, November.
    35. Robert J. Barro, 1995. "Optimal Debt Management," NBER Working Papers 5327, National Bureau of Economic Research, Inc.
    36. Paul R. Krugman, 1991. "Target Zones and Exchange Rate Dynamics," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(3), pages 669-682.
    37. Luis Oscar Herrera & Igal Magendzo, 1997. "Expectativas Financieras y la Curva de Tasas Forward de Chile," Working Papers Central Bank of Chile 23, Central Bank of Chile.
    38. Azariadis, Costas, 1975. "Implicit Contracts and Underemployment Equilibria," Journal of Political Economy, University of Chicago Press, vol. 83(6), pages 1183-1202, December.
    39. Douglas W. Diamond, 1984. "Financial Intermediation and Delegated Monitoring," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 51(3), pages 393-414.
    40. John Y. Campbell & Robert J. Shiller, 1996. "A Scorecard for Indexed Government Debt," NBER Chapters, in: NBER Macroeconomics Annual 1996, Volume 11, pages 155-208, National Bureau of Economic Research, Inc.
    41. Christopher J. Waller & David D. VanHoose, 1992. "Discretionary Monetary Policy and Socially Efficient Wage Indexation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(4), pages 1451-1460.
    42. Turnovsky, Stephen J, 1976. "The Relative Stability of Alternative Exchange Rate Systems in the Presence of Random Disturbances," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 8(1), pages 29-50, February.
    43. Fischer, Stanley & Summers, Lawrence H, 1989. "Should Governments Learn to Live with Inflation?," American Economic Review, American Economic Association, vol. 79(2), pages 382-387, May.
    44. Mr. Enrique G. Mendoza, 1991. "Efficient Arbitrage Under Financial Indexation: The Case of Chile," IMF Working Papers 1991/049, International Monetary Fund.
    45. Joseph E. Stiglitz, 1988. "On the Relevance or Irrelevance of Public Financial Policy," International Economic Association Series, in: Kenneth J. Arrow & Michael J. Boskin (ed.), The Economics of Public Debt, chapter 2, pages 41-76, Palgrave Macmillan.
    46. Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 473-491, June.
    47. Calvo, Guillermo A., 1983. "Staggered prices in a utility-maximizing framework," Journal of Monetary Economics, Elsevier, vol. 12(3), pages 383-398, September.
    48. Rudger Dornbusch & Ilan Goldfajn & Rodrigo O. Valdés, 1995. "Currency Crises and Collapses," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(2), pages 219-294.
    49. Duca, John V & VanHoose, David D, 1991. "Optimal Wage Indexation in a Multisector Economy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(4), pages 859-867, November.
    50. Ball, Laurence & Cecchetti, Stephen G, 1991. "Wage Indexation and Discretionary Monetary Policy," American Economic Review, American Economic Association, vol. 81(5), pages 1310-1319, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. da Silva Filho, Tito Nícias Teixeira, 2005. "Is there too much certainty when measuring uncertainty," MPRA Paper 16383, University Library of Munich, Germany.
    2. Luis F. Céspedes C. & Claudio Soto G., 2006. "Inflation Targeting And Monetary Policy Credibility In Chile," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 9(3), pages 53-70, December.
    3. Mrs. Esther Perez Ruiz, 2016. "Outside the Band: Depreciation and Inflation Dynamics in Chile," IMF Working Papers 2016/129, International Monetary Fund.
    4. Rodrigo Fuentes & Alejandro Jara & Klaus Schmidt-Hebbel & Matías Tapia & Erika Arraño, 2003. "Efectos de la Nominalización de la Política Monetaria en Chile," Working Papers Central Bank of Chile 197, Central Bank of Chile.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Esteban Jadresic, 1998. "The Macroeconomic Consequences of Wage Indexation Revisited," Working Papers Central Bank of Chile 35, Central Bank of Chile.
    2. Mr. Esteban Jadresic, 1998. "The Macroeconomic Consequences of Wage Indexation Revisited," IMF Working Papers 1998/015, International Monetary Fund.
    3. Fernando Lefort & Klaus Schmidt-Hebbel, 2002. "Indexation, Inflation and Monetary Policy: An Overview," Central Banking, Analysis, and Economic Policies Book Series, in: Fernando Lefort & Klaus Schmidt-Hebbel & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Serie (ed.),Indexation, Inflation and MOnetary Policy, edition 1, volume 2, chapter 1, pages 001-018, Central Bank of Chile.
    4. Piersanti, Giovanni, 2012. "The Macroeconomic Theory of Exchange Rate Crises," OUP Catalogue, Oxford University Press, number 9780199653126.
    5. Frank Heinemann, 2003. "The Inflationary Impact of Wage Indexation," CESifo Working Paper Series 867, CESifo.
    6. Esteban Jadresic, 2002. "The Macroeconomic COnsequences of Wage Indexation Revisited," Central Banking, Analysis, and Economic Policies Book Series, in: Fernando Lefort & Klaus Schmidt-Hebbel & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Serie (ed.),Indexation, Inflation and Monetary Policy, edition 1, volume 2, chapter 8, pages 207-258, Central Bank of Chile.
    7. James, Jonathan G. & Lawler, Phillip, 2010. "Union objectives and indexation externalities in a monopolistically competitive economy," Research in Economics, Elsevier, vol. 64(1), pages 28-35, March.
    8. Westerhout, Ed, 2021. "Inflation-Linked Bonds, Nominal Bonds, and Countercyclical Monetary Policies," Discussion Paper 2021-001, Tilburg University, Center for Economic Research.
    9. Johannes Holler, 2013. "Funding Strategies of Sovereign Debt Management: A Risk Focus," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 2, pages 51-74.
    10. Leeper, E.M. & Leith, C., 2016. "Understanding Inflation as a Joint Monetary–Fiscal Phenomenon," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 2305-2415, Elsevier.
    11. Alogoskoufis, George & Malliaris, A.G. & Stengos, Thanasis, 2023. "The scope and methodology of economic and financial asymmetries," The Journal of Economic Asymmetries, Elsevier, vol. 27(C).
    12. Westerhout, Ed, 2021. "Inflation-Linked Bonds, Nominal Bonds, and Countercyclical Monetary Policies," Other publications TiSEM ee384b1f-4e6f-4f30-821e-d, Tilburg University, School of Economics and Management.
    13. Obregon, Carlos, 2018. "Globalization misguided views," MPRA Paper 85813, University Library of Munich, Germany.
    14. Joeri Gorter & Suzanne Kok, 2009. "Agglomeration economies in the Netherlands," CPB Discussion Paper 124.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    15. Obregon, Carlos, 2018. "Globalización visiones equivocadas [Globalization misguided views]," MPRA Paper 86396, University Library of Munich, Germany.
    16. Giuseppe Diana & Pierre‐Guillaume Méon, 2008. "Monetary Policy in the Presence of Asymmetric Wage Indexation," Southern Economic Journal, John Wiley & Sons, vol. 75(1), pages 69-90, July.
    17. Akhand Akhtar Hossain, 2009. "Central Banking and Monetary Policy in the Asia-Pacific," Books, Edward Elgar Publishing, number 12777.
    18. Panizza, Ugo & Fatás, Antonio & Ghosh, Atish R. & ,, 2019. "The Motives to Borrow," CEPR Discussion Papers 13735, C.E.P.R. Discussion Papers.
    19. Niepelt, Dirk, 2014. "Debt maturity without commitment," Journal of Monetary Economics, Elsevier, vol. 68(S), pages 37-54.
    20. Maurice Obstfeld, 1995. "Intenational Currency Experience: New Lessons and Lessons Relearned," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 119-220.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:chb:bcchsb:v02c02pp019-064. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Alvaro Castillo (email available below). General contact details of provider: https://edirc.repec.org/data/bccgvcl.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.