Social pacts have long been a centrepiece of European politics. They are characterized by negotiations among government, employers, workers, and other interest groups over wages and other economic issues. With the growth of globalization and pervasiveness of knowledge, some economists have...

In this book leading European economists examine the current status of social pacts and their future. Particular focus is placed on the role of trade unions, and the positive role they can play for economic and social stability by agreeing to set wages on the basis of a target rate of inflation....