Both the optimal inflation target and the optimal degree of output stabilization are found to be conditional on the prevailing wage bargaining structure.If monopolistic wage setters act as strategic leaders of the monetary policy game, an explicit inflation targeting regime removes inflation...

This paper studies the relationship between central bank independence, wage bargaining structure and macroeconomic performance in OECD countries.A cross-sectional time-series (TSCS) model for inflation, nominal wage growth and unemployment for the period 1973-1996 is estimated using different...

This paper applies the robust control approach to a simple positive theory of monetary policy, when the central bank's model of the economy is subject to misspecifications.It is shown that a central bank should react more aggressively to supply shocks when the model misspecifications grow...

This paper extends Svensson and Woodford's (2003) partial information framework by allowing the private agents to achieve robustness against incomplete information about the structure of the economy by distorting their expectations in a particular direction.It shows how a linear rational...