Revisiting the case for a populist central banker: A comment

Guzzo, Vincenzo; Velasco, Andrés

doi:10.1016/s0014-2921(01)00178-7

Cited by 9 publications

(5 citation statements)

References 2 publications

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“…But this is due to their implicit assumption that wages are contracted in real terms. As shown by Lippi (2002), and recognized in Guzzo and Velasco (2002), when wages are contracted in nominal terms their model implies, as do the other models, that a populist CB is socially optimal provided there is a single monopoly union.…”

mentioning

confidence: 90%

“…As a consequence, unions will pursue higher wage demands and unemployment will rise. According to this supply‐side view, in the extreme case of a monopoly union, a “populist” central bank that cares only about unemployment is optimal for a society that dislikes both inflation and unemploment; see Skott (1997), Cukierman and Lippi (1999), Guzzo and Velasco (1999, 2002), Lawler (2000) and Lippi (2002).…”

Section: Introductionmentioning

confidence: 99%

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Monetary Institutions, Monopolistic Competition, Unionized Labor Markets and Economic Performance*

Coricelli

Cukierman

Dalmazzo

2006

Scandinavian J Economics

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Recent literature on the interactions between labor unions and monetary institutions features either a supply or a demand channel of monetary policy, but not both. This leads to two opposing views about the effects of central bank conservativeness. We evaluate the relative merits of those conflicting views by developing a unified framework. We find that: (i) the effect of conservativeness on employment depends on unions' relative aversion to unemployment versus inflation, and (ii) for plausible values of this relative aversion (and more than one union), social welfare is maximized under a highly conservative central bank. We also evaluate the effects of centralization of wage bargaining and product market competition on unemployment and inflation.

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confidence: 90%

Section: Introductionmentioning

confidence: 99%

Monetary Institutions, Monopolistic Competition, Unionized Labor Markets and Economic Performance*

Coricelli

Cukierman

Dalmazzo

2006

Scandinavian J Economics

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“…Nonetheless, as pointed out by Guzzo and Velasco (2002) a CB that is more liberal than society may still be socially desirable in such a case.…”

Section: Deterrence Through Fears Of Unemployment Versus Deterrencementioning

confidence: 99%

Monetary institutions, monetary union and unionised labour markets: some recent developments

Cukierman¹

2004

Monetary Policy, Fiscal Policies and Labour Markets

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“…Under a fixed exchange rate regime, a wage increase in the shielded sector leads to a relatively large increase in prices in this sector. 17 Under inflation targeting, the above price increase is fought off by the Central Bank aiming to keep the price level down. This is done by inducing an exchange rate appreciation, leading to lower prices in the non-shielded sector.…”

Section: Fixed Exchange Rates Versus Inflation Targetingmentioning

confidence: 99%

A Union‐bashing Model of Inflation Targeting

Meland

2006

Scandinavian J Economics

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This paper shows that in an open two-sector economy, centralization of wage setting may be important in determining the employment (and welfare) effects of different monetary targets. By disciplining unions in the sectors open to international trade, exchange rate targeting yields higher employment than inflation targeting when wage-setting is more centralized in the open sector than in the shielded sector. When wage-setting centralization is higher in the shielded sector, we show that general price-level inflation targeting, while better than exchange rate targeting, is inferior to an inflation target that focuses more heavily on shielded sector prices. Copyright The editors of the "Scandinavian Journal of Economics" 2006 .

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Revisiting the case for a populist central banker: A comment

Cited by 9 publications

References 2 publications

Monetary Institutions, Monopolistic Competition, Unionized Labor Markets and Economic Performance*

Monetary Institutions, Monopolistic Competition, Unionized Labor Markets and Economic Performance*

Monetary institutions, monetary union and unionised labour markets: some recent developments

A Union‐bashing Model of Inflation Targeting

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