The welfare effect of foreign monetary conservatism with non-atomistic wage setters

Vincenzo Cuciniello

Working Papers from Center for Fiscal Policy, Swiss Federal Institute of Technology Lausanne

Abstract: This paper sheds light on the real effects of foreign central bank’s degree of inflation aversion in presence of non-atomistic wage setters. It extends the Lippi’s (2003) framework to an open economy and identifies the key strategic mechanisms between monetary policy and wage-setting decisions so as to assess the real effects of domestic and foreign policy makers’ aversion to inflation. A main finding is that foreign central bank’s aversion to inflation always increases employment. The impact of domestic central bank’s aversion to inflation instead depends on the combination of three strategic effects.

Keywords: Foreign central bank conservatism; centralized wage setting; open-economy macro (search for similar items in EconPapers)
JEL-codes: E58 F41 J51 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2009-04
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
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Citations: View citations in EconPapers (2)

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http://infoscience.epfl.ch/record/141374/files/CFP2009_08_1.pdf

Related works:
Journal Article: The Welfare Effect of Foreign Monetary Conservatism with Nonatomistic Wage Setters (2011)
Journal Article: The Welfare Effect of Foreign Monetary Conservatism with Nonatomistic Wage Setters (2011)
Working Paper: The welfare effect of foreign monetary conservatism with non-atomistic wage setters (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:cif:wpaper:200908

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