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...

This paper studies the question of how to achieve monetary policy credibility and price stability after a financial crisis. We draw stylized facts and conclusions from ten recent cases: Brazil (1999); Bulgaria (1997); Ecuador (2000); Indonesia (1997); Korea (1997); Malaysia (1997); Mexico...