Introduction to the special issue: conflict and coordination in the cost-of-living crisis

Arianna Tassinari, Donato Di Carlo, Christian Ibsen and Oscar Molina Romo

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This special issue analyses governments’ and social partners’ responses to the cost-of-living crisis of 2021–2023, and dynamics of coordination and conflict underlying them. The study of inflation responses needs updating. First, because compared to the 1970s–1980s, the recent inflation crisis was hardly intensified by high wage demands. Secondly, because industrial relations and collective bargaining institutions have over the last three decades undergone liberalisation reforms that have eroded coordination capacities. Contributions to this special issue show cross-country variation in real wage dynamics, inflation’s distributional impacts and governments’ policies to tackle them. The interaction between government policies, collective bargaining institutions and social partners’ strategies largely accounts for this variation. In most cases, governments no longer coordinate with social partners nor use them to enforce wage restraint to internalise inflation shocks. Rather, governments actively manage inflation through direct intervention, framing policies and steering them to either shield competitiveness, support domestic demand or reduce inequalities.

Keywords: inflation; collective bargaining; energy crisis; wage setting; real wages; social pacts (search for similar items in EconPapers)
JEL-codes: J01 J1 R14 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2025-08-31
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Published in Transfer: European Review of Labour and Research, 31, August, 2025, 30(3), pp. 253 - 275. ISSN: 1024-2589

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