Labor Market Regimes and the Effects of Monetary Policy

  title={Labor Market Regimes and the Effects of Monetary Policy},
  author={Douglas A. Hibbs and Nicola Acocella and Giovanni Di Bartolomeo},
  journal={ERN: Monetary Policy Objectives; Policy Designs; Policy Coordination (Topic)},

Trend inflation as a workers’ discipline device

The paper shows that a monetary policy regime that allows for a positive inflation rate disciplines monopolistic wages setters if these, when setting contracts, internalize the consequences of their

Unions, Monopolistic Competition and the Optimal Monetary Regime

This paper considers the optimal monetary regime in a monopolistically competitive economy where wages are set by non-atomistic (i.e. large) unions. In such a context, the conduct of monetary policy

Labour Market and Monetary Policy in South Africa

This paper analyses the in‡fluence of the South African labour market on the conduct of monetary policy. Because of the weak response of wages to changes in employment, the South African Reserve

Labor Market Imperfections, Real Wage Rigidities and Financial Shocks

By using the recent Gertler and Kiyotaki.s (2010) setup, this paper explores the interaction between real distortions stemming from the labor market institutions and financial shocks. We find that

Monetary Discipline as a Substitute for Fiscal Reforms and Market Liberalisations

type="main" xml:lang="en"> In an economy with wage-setting unions where the government has gains from redistribution, we analyse the incentive of incumbent politicians to implement monetary

Wage Rigidity, Collective Bargaining and the Minimum Wage: Evidence from French Agreement Data

Using several unique data sets on wage agreements at both industry and firm levels in France, we document stylized facts on wage stickiness and the impact of wage-setting institutions on wage

Trend inflation as a workers disciplining device in a general equilibrium model

In New Keynesian models nominal rigidities determine socially inefficient outcomes. Our paper reverses this view: properly designed monetary policies may take advantage of predetermined nominal wages

The issue of instability in a simple policy game between the central bank and a representative union

In the recent economic literature the independence of the central bank is often considered to be one of the most effective guarantees to achieve price stability. A strong theoretical basis for this

Wage Rigidity, Collective Bargaining, and the Minimum Wage: Evidence from French Agreement Data

Abstract Using data sets on wage agreements at both industry and firm levels in France, we document stylized facts on wage stickiness. The average duration of wages is a little less than one year,



The interaction of monetary policy and wages

This paper focuses on the interaction of monetary policy and wage formation in economies with strong labor unions. Government and unions are viewed as endogenous utility maximizers and the

Monetary Institutions, Monopolistic Competition, Unionized Labor Markets and Economic Performance

Recent literature on the interactions between labor unions and monetary institutions features either a supply or a demand channel of monetary policy, but not both. This leads to two opposing views

Stabilisation, Policy Targets and Unemployment in Imperfectly Competitive Economies

This paper argues that the rate of equilibrium unemployment depends on the objectives of the central bank. In a model where the central bank uses monetary policy to stabilize the economy, the authors

The Nonneutrality of Monetary Policy with Large Price or Wage Setters

Monetary rules matter for the equilibrium rate of employment when the number of price-wage setters is small, even when assuming rational expectations, complete information, central bank

Strategic Monetary Policy with Non-Atomistic Wage Setters

The literature on monetary policy games establishes that policy makers' attempts to boost employment above the 'natural' rate are futile and result in an inflationary bias when wage setters have

Monetary Institutions, Monetary Union and Unionized Labor Markets - Some Recent Developments ∗

This paper is a selective survey of recent developments regarding the strategic interaction between labor unions and the monetary authority. Since Rogoff (1985) influential work a basic tenet of the

Long-Term Contracts, Rational Expectations, and the Optimal Money Supply Rule

  • S. Fischer
  • Economics
    Journal of Political Economy
  • 1977
The paper is concerned with the role of monetary policy and argues that activist monetary policy can affect the behavior of real output, rational expectations notwithstanding. A rational expectations


The impact of central bank independence and wage-bargaining structure on inflation and unemployment is explored theoretically and tested empirically for a sample of seventeen OECD countries over two

A Positive Theory of Monetary Policy in a Natural Rate Model

A discretionary policymaker can create surprise inflation, which may reduce employment and raise government revenue. But when people understand the policymaker's objectives, these surprises cannot