Studies the interactions between monetary and wage policies in the euro area. This book discusses the process of policy competition and the structure of policy cooperation. It also features numerical simulations of policy competition and numerical solutions to policy cooperation

This paper estimates a series of shocks to hit the US economy during the Great Depression, using a New Keynesian model with unemployment and bargaining frictions. Shocks to long-run inflation expectations appear to account for much of the cyclical behavior of employment, while an increase in...