Economic Performance and Stabilization Policy in a Monetary Union with Imperfect Labour and Goods Markets
46 Pages Posted: 17 Apr 2001
Date Written: March 2001
Abstract
This Paper develops a framework for the analysis of the effects of institutions on economic performance in a monetary union in the presence of stabilization policy, unionized labour markets and monopolistically competitive price setting firms. Nominal wages are fixed contractually. In spite of full price flexibility transmission of monetary policy operates via both aggregate demand and aggregate supply channels. The Paper relates average, as well as country-specific economic performance within the monetary union, broken down to country size, number of unions, the degree of product differentiation on product markets, and central bank conservativeness. Economic performance is characterized by unemployment, inflation, real wages and competitiveness. Both average, as well as country-specific, economic performance in the presence of (possibly) heterogeneous shocks and a unified stabilization policy are evaluated.
Keywords: Central bank conservativeness, monetary union, monopolistic competition, shocks, stabilization, stabilization policy, wage bargaining
JEL Classification: E24, E31, E58
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Wages and Wage-Bargaining Institutions in the Emu: A Survey of the Issues
-
The Case for a Populist Banker
By Andrés Velasco and Vincenzo Guzzo
-
The Case for a Populist Banker
By Andrés Velasco and Vincenzo Guzzo
-
Monetary Institutions, Monopolistic Competition, Unionized Labor Markets and Economic Performance
By Fabrizio Coricelli, Alex Cukierman, ...
-
Strategic Monetary Policy with Non-Atomistic Wage-Setters: Some Evidence
-
The Costs and Benefits of Various Wage Bargaining Structures An Empirical Exploration