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

In this paper we critically review the literature on the political economy of monetary policy, with an eye on the questions raised by the recent financial crisis. We begin with a discussion of rules versus discretion. We then examine the issue of the central bank’s independence (CBI) both in...