UNIONS, FISCAL POLICY AND CENTRAL BANK TRANSPARENCY

Giuseppe Ciccarone, Enrico Marchetti () and Giovanni Di Bartolomeo ()

Manchester School, 2007, vol. 75, issue 5, pages 617-633

Abstract: In a unionized economy with endogenous fiscal policy central bank transparency has two contrasting effects on wages, the relative strength of which determines the macroeconomic performance. This finding allows us to demonstrate that (i) if the central bank is populist the effect of transparency is negative, and (ii) if policy makers are sufficiently conservative and the government is active, transparency decreases inflation and unemployment, but opposite results apply if a populist government faces a tight fiscal constraint. Macroeconomic volatility disappears with full transparency and increases, in general, with opacity, but the relationship is hump-shaped when the central bank is strongly populist. Copyright © 2007 The Authors; Journal compilation © 2007 Blackwell Publishing Ltd and The University of Manchester.

Date: 2007
View citations in EconPapers

Downloads: (external link)
http://www.blackwell-synergy.com/doi/abs/10.1111/j.1467-9957.2007.01033.x link to full text (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Unions, fiscal policy and central bank transparency (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:bla:manchs:v:75:y:2007:i:5:p:617-633

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1463-6786

Access Statistics for this article

Manchester School is edited by Keith Blackburn

More articles in Manchester School from University of Manchester
Series data maintained by Christopher F. Baum ().