Summary The paper analyzes the dynamic effects of anticipated symmetric demand and supply side policies within the framework of a macroeconomic model of a small monetary union, which is characterized by asymmetric wage adjustment equations of Phillips’ curve type. It is shown that an...

Summary This paper analyzes the dynamic effects of oil price increases in a small two-country monetary union with asymmetric wage adjustment equations. Common oil price shocks lead during the adjustment process to temporary divergences in output and inflation and also to reversals in the...