Drudi, Francesco; Giordano, Raffaela - In: Scandinavian Journal of Economics 102 (2000) 4, pp. 645-68
Price versus productivity-indexing is considered in a model of monetary policy with incomplete information and wage bargaining. In a perfectly price-indexed economy, the inflationary bias due to lack of credibility is eliminated. However, productivity-indexing is more appropriate to dampen...