IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Institutions and macroeconomic performance: Central bank independence, labour market institutions and the perspectives for inflation and employment in the European Monetary Union

  • Hein, Eckhard

Starting from a Post-Keynesian model in which employment is determined by effective demand and the NAIRU is viewed as a limit to employment, enforced by monetary policy reacting upon conflict inflation, the effects of central bank independence and labour market institutions on macroeconomic performance are considered and the perspectives for employment and inflation in the European Monetary Union are discussed. Central bank independence seems to be associated with stable prices and to prevent the rate of unemployment from falling below the NAIRU. But price stability also depends on labour market institutions. Horizontally and vertically co-ordinated wage bargaining allows for a considerable reduction of the NAIRU and hence of the real costs of price stability. Therefore, the perspectives for employment and inflation in the European Monetary Union depend on the development of the degree of co-ordination of wage bargaining and on the monetary strategy chosen by the independent European Central Bank. Different scenarios derived from these determinants are finally discussed.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: https://econstor.eu/bitstream/10419/50460/1/332113957.pdf
Download Restriction: no

Paper provided by Hans-Böckler-Stiftung, Wirtschafts- und Sozialwissenschaftliches Institut (WSI) in its series WSI Discussion Papers with number 95.

as
in new window

Length:
Date of creation: 2001
Date of revision:
Handle: RePEc:zbw:wsidps:95
Contact details of provider: Postal:
Bertha-von-Suttner-Platz 1, D-40227 Düsseldorf

Phone: +49 211 7778 0
Fax: +49 (0)211-7778-3124
Web page: http://www.boeckler.de/index_wsi.htm
Email:


More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Calmfors, Lars, 1998. "Macroeconomic Policy, Wage Setting, and Employment--What Difference Does the EMU Make?," Oxford Review of Economic Policy, Oxford University Press, vol. 14(3), pages 125-51, Autumn.
  2. Forder, James, 1998. "Central Bank Independence--Conceptual Clarifications and Interim Assessment," Oxford Economic Papers, Oxford University Press, vol. 50(3), pages 307-34, July.
  3. Carlin, Wendy & Soskice, David, 1990. "Macroeconomics and the Wage Bargain: A Modern Approach to Employment, Inflation, and the Exchange Rate," OUP Catalogue, Oxford University Press, number 9780198772446, December.
  4. Jackman, Richard & Layard, Richard, 1991. "Does Long-term Unemployment Reduce a Person's Chance of a Job? A Time-Series Test," Economica, London School of Economics and Political Science, vol. 58(229), pages 93-106, February.
  5. Hein, Eckhard, 1999. "Zentralbank-Politik und makroökonomische Ergebnisse: eine sozio-institutionelle Interpretation
    [Central Bank Policies and Macroeconomic Results: A Socio-institutional Interpretation]
    ," MPRA Paper 18881, University Library of Munich, Germany.
  6. Heise, Arne & Schulten, Thorsten, 1999. "Lohndumping in der EWU - Geht ein Gespenst um in Europa? Eine Replik," Wirtschaftsdienst – Zeitschrift für Wirtschaftspolitik (1949 - 2007), ZBW – German National Library of Economics / Leibniz Information Centre for Economics, vol. 79(2), pages 89-94.
  7. Posen, Adam, 1998. "Central Bank Independence and Disinflationary Credibility: A Missing Link?," Oxford Economic Papers, Oxford University Press, vol. 50(3), pages 335-59, July.
  8. Eijffinger, S.C.W. & Schaling, E. & Hoeberichts, M.M., 1998. "Central bank independence : A sensitivity analysis," Other publications TiSEM ebcf989c-472b-4d24-b7c2-5, Tilburg University, School of Economics and Management.
  9. Ching-to Albert Ma & Andrew M. Weiss, 1990. "A Signaling Theory of Unemployment," NBER Working Papers 3565, National Bureau of Economic Research, Inc.
  10. Robert J. Gordon, 1997. "The Time-Varying NAIRU and Its Implications for Economic Policy," Journal of Economic Perspectives, American Economic Association, vol. 11(1), pages 11-32, Winter.
  11. 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.
  12. Mangano, Gabriel, 1998. "Measuring Central Bank Independence: A Tale of Subjectivity and of Its Consequences," Oxford Economic Papers, Oxford University Press, vol. 50(3), pages 468-92, July.
  13. Soskice, David, 1999. "The political economy of EMU: rethinking the effects of monetary integration on Europe," Discussion Papers, Research Unit: Economic Change and Employment FS I 99-302, Social Science Research Center Berlin (WZB).
  14. Allsopp, Christopher & Vines, David, 1998. "The Assessment: Macroeconomic Policy after EMU," Oxford Review of Economic Policy, Oxford University Press, vol. 14(3), pages 1-23, Autumn.
  15. Taylor, John B., 1983. "`Rules, discretion and reputation in a model of monetary policy' by Robert J. Barro and David B. Gordon," Journal of Monetary Economics, Elsevier, vol. 12(1), pages 123-125.
  16. Thomas I. Palley, 1998. "Restoring Prosperity: Why the U.S. Model Is Not the Answer for the United States or Europe," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 20(3), pages 337-353, April.
  17. Robert J. Barro & David B. Gordon, 1983. "Rules, Discretion and Reputation in a Model of Monetary Policy," NBER Working Papers 1079, National Bureau of Economic Research, Inc.
  18. Rowthorn, R E, 1977. "Conflict, Inflation and Money," Cambridge Journal of Economics, Oxford University Press, vol. 1(3), pages 215-39, September.
  19. Nickell, S., 1991. "Wages, Unemployment and Population Change," Economics Series Working Papers 99122, University of Oxford, Department of Economics.
  20. Driffill, John, 1988. "Macroeconomic policy games with incomplete information : A survey," European Economic Review, Elsevier, vol. 32(2-3), pages 533-541, March.
  21. Arestis, Philip, 1996. "Post-Keynesian Economics: Towards Coherence," Cambridge Journal of Economics, Oxford University Press, vol. 20(1), pages 111-35, January.
  22. Soskice, David & Iversen, Torben, 1998. "Multiple Wage-Bargaining Systems in the Single European Currency Area," Oxford Review of Economic Policy, Oxford University Press, vol. 14(3), pages 110-24, Autumn.
  23. Thomas Jordan, 1997. "Disinflation costs, accelerating inflation gains, and central bank independence," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 133(1), pages 1-21, March.
  24. Olivier Blanchard & Lawrence F. Katz, 1997. "What We Know and Do Not Know about the Natural Rate of Unemployment," Journal of Economic Perspectives, American Economic Association, vol. 11(1), pages 51-72, Winter.
  25. Cukierman, Alex & Webb, Steven B & Neyapti, Bilin, 1992. "Measuring the Independence of Central Banks and Its Effect on Policy Outcomes," World Bank Economic Review, World Bank Group, vol. 6(3), pages 353-98, September.
  26. Alesina, Alberto & Summers, Lawrence H, 1993. "Central Bank Independence and Macroeconomic Performance: Some Comparative Evidence," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 25(2), pages 151-62, May.
  27. Kromphardt, Jürgen, 1999. "Lohnsenkungswettbewerb in der EWU: Deflationsgefahr oder Beschäftigungsimpuls?," Wirtschaftsdienst – Zeitschrift für Wirtschaftspolitik (1949 - 2007), ZBW – German National Library of Economics / Leibniz Information Centre for Economics, vol. 79(2), pages 85-89.
  28. Soskice, David, 1990. "Wage Determination: The Changing Role of Institutions in Advanced Industrialized Countries," Oxford Review of Economic Policy, Oxford University Press, vol. 6(4), pages 36-61, Winter.
  29. Manfred Gärtner, 1997. "Central Bank Independence and the Sacrifice Ratio: The Dark Side of the Force," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 133(III), pages 513-538, September.
  30. Layard, R. & Nickell, S., 1991. "Unemployment in the OECD Countries," Economics Series Working Papers 99130, University of Oxford, Department of Economics.
  31. Arestis, Philip & McCauley, Kevin & Sawyer, Malcolm, 2001. "An Alternative Stability Pact for the European Union," Cambridge Journal of Economics, Oxford University Press, vol. 25(1), pages 113-30, January.
  32. Hall, Peter A. & Franzese, Robert J., 1998. "Mixed Signals: Central Bank Independence, Coordinated Wage Bargaining, and European Monetary Union," International Organization, Cambridge University Press, vol. 52(03), pages 505-535, June.
  33. Guy Debelle & Stanley Fischer, 1994. "How independent should a central bank be?," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 38, pages 195-225.
  34. Havrilesky, Thomas & Granato, James, 1993. "Determinants of Inflationary Performance: Corporatist Structures vs. Central Bank Autonomy," Public Choice, Springer, vol. 76(3), pages 249-61, July.
  35. Berger, Helge & de Haan, Jakob & Eijffinger, Sylvester C W, 2001. " Central Bank Independence: An Update of Theory and Evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 15(1), pages 3-40, February.
  36. Lavoie, M, 1995. "Horizontalism, Structuralism, Liquidity Preference and the Principle of Increasing Risk," Working Papers 9513e, University of Ottawa, Department of Economics.
  37. Bhaduri, Amit & Marglin, Stephen, 1990. "Unemployment and the Real Wage: The Economic Basis for Contesting Political Ideologies," Cambridge Journal of Economics, Oxford University Press, vol. 14(4), pages 375-93, December.
  38. Philip Arestis & Luiz Fernando de Paula & Fernando Ferrari-Filho, 2008. "Inflation Targeting in Brazil," Economics Working Paper Archive wp_544, Levy Economics Institute.
  39. Lars Calmfors, 1993. "Centralisation of Wage Bargaining and Macroeconomic Performance: A Survey," OECD Economics Department Working Papers 131, OECD Publishing.
  40. Douglas Staiger & James H. Stock & Mark W. Watson, 1997. "The NAIRU, Unemployment and Monetary Policy," Journal of Economic Perspectives, American Economic Association, vol. 11(1), pages 33-49, Winter.
  41. Iversen, Torben, 1999. "The Political Economy of Inflation: Bargaining Structure or Central Bank Independence?," Public Choice, Springer, vol. 99(3-4), pages 237-58, June.
  42. 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 473-91, June.
  43. Crouch, Colin (ed.), 2000. "After the Euro: Shaping Institutions for Governance in the Wake of European Monetary Union," OUP Catalogue, Oxford University Press, number 9780198296393, December.
  44. Hein, Eckhard & Ochsen, Carsten, 2000. "Monetary interest rates, income shares, and investment: Theory and empirical evidence for France, Germany, the UK, and the USA," Violette Reihe Arbeitspapiere 11/2000, Promotionsschwerpunkt "Globalisierung und Beschaeftigung".
  45. Iversen, Torben, 1999. "The Political Economy of Inflation: Bargaining Structure or Central Bank Independence? Erratum," Public Choice, Springer, vol. 101(3-4), pages 285-306, December.
  46. James K. Galbraith, 1997. "Time to Ditch the NAIRU," Journal of Economic Perspectives, American Economic Association, vol. 11(1), pages 93-108, Winter.
  47. Al-Marhubi, Fahim & Willett, Thomas D, 1995. "The Anti Inflationary Influence of Corporatist Structures and Central Bank Independence: The Importance of the Hump Shaped Hypothesis," Public Choice, Springer, vol. 84(1-2), pages 153-62, July.
  48. Robert J. Flanagan, 1999. "Macroeconomic Performance and Collective Bargaining: An International Perspective," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1150-1175, September.
  49. Bean, Charles, 1998. "Monetary Policy under EMU," Oxford Review of Economic Policy, Oxford University Press, vol. 14(3), pages 41-53, Autumn.
  50. Pivetti, Massimo, 1996. "Maastricht and the Political Independence of Central Banks: Theory and Facts," Contributions to Political Economy, Oxford University Press, vol. 15(0), pages 81-104.
  51. Kenneth Rogoff, 1985. "The Optimal Degree of Commitment to an Intermediate Monetary Target," The Quarterly Journal of Economics, Oxford University Press, vol. 100(4), pages 1169-1189.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:zbw:wsidps:95. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics)

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.