-bias arises due to the lobbying pressures of outsiders. Furthermore, we show that if lobbying pressures are high enough, an … feature of lobbying pressures has an impact on the stabilization properties of monetary policy. When a supply shock occurs …, the shock is totally absorbed by a forward-looking trade-union which has no costs of lobbying, independently of any finite …

monetary policy on output and prices for Mauritius, using data for 1999-2009. The results show that (i) an unexpected monetary … policy tightening-an increase in the Bank of Mauritius policy interest rate-leads to a decline in prices and output but the …