Wage Bargaining and the Phillips Curve in Italy
Alessandra Del Boca (),
Franco Spinelli and
No 41, Mo.Fi.R. Working Papers from Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences
The theme of this paper is whether there was a textbook-like Phillips Curve in post-WWII Italy. We estimate a standard model of the relationship between inflation and the level of real economic activity over the 1949-1998 period and find no evidence of a significant and positive feedback from output to prices. We also estimate similar models for the UK and the US and compare them with the Italian experience. Italy stands out as sharply different from the two Anglo-Saxon countries. We attribute this difference, among other factors, to the role of wage coordination and indexation mechanisms. In particular, the scala mobile, the rigid indexation mechanism aimed at protecting wages from inflation contributed to the persistent inflation bias that Italy experienced almost until its entry into the EMU.
Keywords: Italy; Phillips Curve; inflation; ndexation; wage bargaining (search for similar items in EconPapers)
JEL-codes: E31 E32 J50 N10 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:anc:wmofir:41
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