Bar-Ilan, Avner; Zanello, Alessandro - In: Economica 63 (1996) 252, pp. 687-99
This paper rationalizes the absence of positive wage indexation in labour contracts--that is, of indexing provisions that link wage increases to inflation. We investigate the equilibrium of a policy game in a stochastic economy in which wage-setters and a policy-maker interact strategically in...