Predetermined Wages and Prices and the Impact of Expansionary Government Policy

Russell Cooper

The Review of Economic Studies, 1990, vol. 57, issue 2, 205-214

Abstract: This paper characterizes the monetary equilibria of an economy with commodity and labour contracts. If government policy is not "too variable," there may exist an equilibrium with predetermined wages and prices. In this equilibrium, observed changes in the money supply to finance government purchases have persistent real effects. The paper also provides theoretical support for an inverse relationship between the degree of indexation in contracts and the persistence of policy effects.

Date: 1990
References: Add references at CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://hdl.handle.net/10.2307/2297378 (application/pdf)
Access to full text is restricted to subscribers.

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:restud:v:57:y:1990:i:2:p:205-214.

Access Statistics for this article

The Review of Economic Studies is currently edited by Thomas Chaney, Xavier d’Haultfoeuille, Andrea Galeotti, Bård Harstad, Nir Jaimovich, Katrine Loken, Elias Papaioannou, Vincent Sterk and Noam Yuchtman

More articles in The Review of Economic Studies from Review of Economic Studies Ltd
Bibliographic data for series maintained by Oxford University Press ().