Customer Markets, Inflation and Unemployment in a Dynamic Model with a Range of Equilibria

Vincenti, Claudio De

doi:10.1111/1467-999x.t01-1-00103

Cited by 5 publications

(2 citation statements)

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“…To account for a time‐varying NAIRU, several authors have analyzed the role of hysteresis in potential output (Dutt, ; Lavoie, ; Storm & Naastepad, ), while others have suggested that wage and price formation may heavily influenced by ‘endogenous norms’, with a similar result (Arestis & Skott, ; Michl, in press; Skott, ; Stockhammer, ). Other contributions explore the role of customer markets (De Vincenti, ), entry and exit by firms (Ohyama, ) and the employment decisions by employers (Mota, Varejão, & Vasconcelos, ) . The critique of the NAIRU is part of a broader framework where demand shocks have permanent effects on real variables, including a large list of contributions (see e.g., Bruno, ; Commendatore, Panico, & Pinto, ; Cross, ; Fontana & Palacio‐Vera, ; Schoder, , among others).…”

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confidence: 99%

“…4 To account for a time-varying NAIRU, several authors have analyzed the role of hysteresis in potential output (Dutt, 2006;Lavoie, 2006;Storm & Naastepad, 2012), while others have suggested that wage and price formation may heavily influenced by 'endogenous norms', with a similar result (Arestis & Skott, 1993;Michl, in press;Skott, 2005;Stockhammer, 2008). Other contributions explore the role of customer markets (De Vincenti, 2001), entry and exit by firms (Ohyama, 1996) and the employment decisions by employers (Mota,4 There are exceptions in the New Consensus literature, for example the insider-outsider models. These models account for the fact that the rate of unemployment seems to meander around without settling at a particular level, and its evolution is better captured from its own past values (Solow, 1990).…”

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Endogenous norms in wage and price setting and hysteresis in the real exchange rate

Libman

2018

Metroeconomica

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Real exchange rates are often ‘disconnected’ from fundamentals. Mean reversion toward equilibrium operates at a slow pace (if it operates at all), and when inflation is low the real exchange rate tracks closely the nominal exchange rate for prolonged periods of time. Using a simple open economy model, we show that including endogenous norms in wage and price setting in an open economy set‐up can lead to hysteresis in the real exchange rate. For a given set of fundamentals, the real exchange rate may settle down at different equilibria and exchange rate policies are not necessarily neutral in the long‐run.

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Section: Related Literaturementioning

confidence: 99%

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Endogenous norms in wage and price setting and hysteresis in the real exchange rate

Libman

2018

Metroeconomica

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The European Union

El-Agraa

2011

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The European Union has established itself as a leading text that provides readers from all disciplines with a sound understanding of the economics and policies of the EU. Its wealth of information, detail and analysis has ensured that previous editions have been read by a generation of students, researchers and policy makers. It covers all major EU policy areas as well as theories of economic integration, the theory of economic and monetary union (EMU), the measurement of the economic effects of European integration and the legal dimension in EU integration. It also includes an explanation and analysis of all recent developments affecting the EU such as enlargement, the ratification of the Nice Treaty and the Convention for the Future of Europe. This edition has been thoroughly revised and updated and includes new resources to help students and teachers, including summaries, review questions, suggestions for essay titles and further reading lists.

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The Effectiveness of Incomes Policies, in Australia Bargaining and Inflation Targetting Enterprise

Lye

McDonald

2004

Australian Economic Papers

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This paper updates earlier estimates that show the existence of a range of equilibrium rates of unemployment in Australia. Within the range of equilibria framework, the paper goes on to test the effectiveness of incomes policies, enterprise bargaining and inflation-target based monetary policy for influencing the rate of inflation in Australia in the period 1965 to 2001. Incomes policies, especially the Accord, and enterprise bargaining are shown to have caused permanent reductions in the rate of inflation. The inflation-target based monetary policy is shown to be associated with, but is not shown to have caused, a reduced impact on inflation of changes in the level of activity. Copyright 2004 University of Adelaide and Flinders University of South Australia and Blackwell Publishing Asia Pty Ltd..

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Customer Markets, Inflation and Unemployment in a Dynamic Model with a Range of Equilibria

Cited by 5 publications

References 25 publications

Endogenous norms in wage and price setting and hysteresis in the real exchange rate

Endogenous norms in wage and price setting and hysteresis in the real exchange rate

The European Union

The Effectiveness of Incomes Policies, in Australia Bargaining and Inflation Targetting Enterprise

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