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The macroeconomics of social pacts

  • Nicola Acocella

    (University of Rome I)

  • Giovanni Di Bartolomeo

    (University of Rome I)

  • Patrizio Tirelli

    (University of Milan Bicocca)

In this paper we analyze macroeconomic interactions among trade unions, the central bank and the fiscal policymaker. We explicitly model trade unionsconcern for public expenditure, paving the way for an analysis of the potential gains from cooperation between the fiscal policymaker and the trade unions, i.e. the so-called corporatist or social pacts that have characterized economic policies in a number of European countries in the last few decades. We also show that central bank conservatism or administrative ceilings on public expenditure may be ineffective, as tax rates and real wage claims are strategic substitutes.

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Paper provided by EconWPA in its series Labor and Demography with number 0410003.

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Length: 20 pages
Date of creation: 04 Oct 2004
Date of revision:
Handle: RePEc:wpa:wuwpla:0410003
Note: Type of Document - pdf; pages: 20
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