Policy Credibility and Inflation in a Wage-Setting Game.
This paper combines the conventional monetary policy game with a wage-setting game among several noncooperating wage setters (each with some monopoly power). The inflationary bias in market economies is explained in terms of the wage-competition bias. This bias does not disappear even when the central bank communicates its policy goals precisely and credibly. In a policy game with several noncooperative monopolistic wage setters and a central bank, if discretionary policy is interpreted as wage setters' being Stackelberg leaders relative to the central bank, a discretionary policy leads to both higher inflation and lower output.
Year of publication: |
1992
|
---|---|
Authors: | Akhand, Hafiz A. |
Published in: |
Canadian Journal of Economics. - Canadian Economics Association - CEA. - Vol. 25.1992, 2, p. 407-19
|
Publisher: |
Canadian Economics Association - CEA |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
Economic development in Pacific Asia
Akhand, Hafiz A., (2005)
-
Marginal income tax rates in the United States : a non-parametric approach
Akhand, Hafiz A., (2002)
-
Central bank independence and growth : a sensitivity analysis
Akhand, Hafiz A., (1998)
- More ...