Opposing recommendations with respect to key sequencing issues characterize the controversy between the advocates of the orthodox (technocratic) approach and the recently popularized political economy approach. It is suggested that the concept of credibility provides in many cases a fruitful...

This paper characterizes the wage setting behavior in a totally unionized economy under different monetary policy rules. The wage formation strategy of the union can be either aggressive or cooperative.. As long as the union is fully cooperative and in the absence of shocks, the government can...