The Optimal Mix of Wage Indexation and Foreign Exchange Market Intervention

Michael Devereux

Journal of Money, Credit and Banking, 1988, vol. 20, issue 3, 381-92

Abstract: This paper develops a model in which wage indexation and foreign exchange market intervention can be used simultaneously for policy purposes. With the type of wage indexation used, there is shown to be a clear separation of function between the two instruments. Intervention should be used only to offset demand-side disturbances, while indexation should depend upon both demand and supply disturbances. Copyright 1988 by Ohio State University Press.

Date: 1988
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Persistent link: https://EconPapers.repec.org/RePEc:mcb:jmoncb:v:20:y:1988:i:3:p:381-92

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