Inflationary performance in a monetary union with large wage setters (original) (raw)
2004, Macroeconomic Policymaking in the EMU
Related papers
Zentrum für Europäische Integrationsforschung Center for European Integration Studies
2009
Building on a micro-founded model of a two region-world economy in the tradition of the new open economy literature, this paper analyses the strategic interaction of large wage-setters and the central bank when switching from a regime of uncoordinated national monetary policies to a monetary union. The establishment of a monetary union is shown to favour wage restraint, provided the uni...ed central bank is not too conservative. Wage discipline may reduce equilibrium in‡ation in a monetary union relative to the one under uncoordinated national monetary policies when wage setting is centralised across member countries. JEL codes:E5, F4
Loading Preview
Sorry, preview is currently unavailable. You can download the paper by clicking the button above.