Monetary Regimes and the Co-Ordination of Wage Setting
Steinar Holden ()
No 429, CESifo Working Paper Series from CESifo
International comparisons show that countries with co-ordinated wage setting generally have lower unemployment than countries with less co-ordinated wage setting. This paper argues that the monetary regime may affect whether co-ordination among many wage setters is feasible. A strict monetary regime, like a country-specific inflation target, to some extent disciplines wage setters, so that the consequences of uncoordinated wage setting are less detrimental than under a more passive monetary regime (eg a monetary union). Thus, the gains from co-ordination are larger under a passive regime. Under some circumstances a passive regime may induce co-operation in wage setting, and thus lower unemployment, when a stricter regime would not.
Keywords: Wage setting; co-ordination; equilibrium unemployment; monetary regime; monetary union; wage moderation (search for similar items in EconPapers)
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Journal Article: Monetary regimes and the co-ordination of wage setting (2005)
Working Paper: Monetary regime and the co-ordination of wage setting (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_429
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