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Strategic Monetary Policy with Non-Atomistic Wage Setters

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  • Francesco Lippi

    (Bank of Italy - Research Department)

Abstract

Monetary policy analyses usually assume an atomistic private sector, thereby ignoring potential interactions between policy and wage-setting decisions. Yet, non-atomistic wage setters are a key feature of several industrialized economies. We study the economic consequence of non-atomistic agents and show that this qualifies previous results on the effects and desirability of a conservative central banker. In particular, the central bank aversion to inflation may have a permanent effect on structural employment, while no such effect emerges with atomistic agents.

Suggested Citation

  • Francesco Lippi, 2003. "Strategic Monetary Policy with Non-Atomistic Wage Setters," CEIS Research Paper 17, Tor Vergata University, CEIS.
  • Handle: RePEc:rtv:ceisrp:17
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    References listed on IDEAS

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    More about this item

    Keywords

    conservatism; non-atomistic agents; wage-setting;
    All these keywords.

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining

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