Optimal Union Wage Setting Behaviour and the Non-neutrality of Anticipated Monetary Changes

Howard F Naish

Oxford Economic Papers, 1988, vol. 40, issue 2, 346-64

Abstract: A model of optimal union wage setting behavior is developed in whic h anticipated monetary changes are not neutral in the short run. This result depends on two elements. First, fully anticipated monetary changes affect the variance of optimal forecasts. Second, changes in the variance of price forecasts lead to changes in real union behavior, provided that union utility functions are geometrically asymmetric, which, it is argued, will typically be the case. It is shown how, under certain conditions, a fully anticipated monetary contraction can actually lead to a higher nominal wage rate and price level. Copyright 1988 by Royal Economic Society.

Date: 1988
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://links.jstor.org/sici?sici=0030-7653%2819880 ... CO%3B2-%23&origin=bc full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

Related works:
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: https://EconPapers.repec.org/RePEc:oup:oxecpp:v:40:y:1988:i:2:p:346-64

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

Oxford Economic Papers is currently edited by James Forder and Francis J. Teal

More articles in Oxford Economic Papers from Oxford University Press Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK.
Bibliographic data for series maintained by Oxford University Press ().