Socially optimal monetary policy institutions

Jerger, Jürgen

doi:10.1016/s0176-2680(02)00118-0

Cited by 10 publications

(7 citation statements)

References 27 publications

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“…An 9 Acocella and Ciccarone (1997) generalize the above result by taking into consideration also public debt. Jerger (2002) demonstrates also in a different setting that the traditional paradigm of classical dichotomy does not hold if wage setters are inflation averse. 10 See Cukierman (2004) for a survey.…”

Section: Two Fundamental Propositionsmentioning

confidence: 97%

Towards a New Theory of Economic Policy: Continuity and Innovation

Acocella

Bartolomeo

2008

Advances in Computational Economics

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This paper outlines the evolution of the theory of economic policy from the classical contributions of Frisch, Hansen, Tinbergen and Theil to situations of strategic interaction. Andrew Hughes Hallett has taken an active and relevant part in this evolution, having contributed to both the development and recent rediscovery of the classical theory, with possible relevant applications for model building.JEL Classification: C72, E52, E61.

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Section: Two Fundamental Propositionsmentioning

confidence: 97%

Towards a New Theory of Economic Policy: Continuity and Innovation

Acocella

Bartolomeo

2008

Advances in Computational Economics

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“…(, ) and Soskice and Iversen (, ) have shown that a conservative central banker can be beneficial also because he eliminates negative wage externalities in decentralized wage‐setting systems . However, the conservative central banker is only an imperfect substitute for the lack of union coordination, and wage centralization is a Pareto superior solution (Jerger, ; Acocella et al . ) .…”

Section: The Different Institutions For Dealing With the Social Conflictmentioning

confidence: 99%

“… See inter alia Detken and Gärtner (), Gylfason and Lindbeck (), Cubitt (), Guzzo and Velasco (), Cukierman and Lippi (, ), Jerger (), Lippi (), Coricelli et al . (, ), Efthimiadis (), Acocella et al .…”

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The Cost of Social Pacts

Acocella

Bartolomeo

2011

Bulletin of Econ Res

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The paper deals with the various institutions capable of improving the macroeconomic performance in a situation of conflict between unions and the government. In particular, we discuss the difficulty of agreeing with a cooperative solution and the need for some kind of explicit or implicit compensation for unions in signing a social pact. A cooperative solution encapsulating the operation of the different mechanisms designed to cope with the conflict and including the various elements of compensation is presented. The model shows that the amount of the explicit compensation depends on the extent of the strategic conflict between the parties as well as on the factors that determine the implicit compensation (i.e., unions' inflation aversion, partisanship) or are partial substitutes for it (i.e., the conservative central banker). Finally, the role played by external anticipated and unanticipated shocks is also discussed

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“…If monetary policy would simply react such that prices rise in proportion to nominal wages, no real variable would be affected, of course. As it is well known, monetary policymakers may react with expansion or contraction to a wage hike, depending to what extent they aim to stabilize nominal or real variables (see Jerger (2002) for an account of models with endogenous monetary policy).…”

Section: Different Scenariosmentioning

confidence: 99%

Wage Hikes as Supply and Demand Shock

Jerger

Michaelis

2003

Metroeconomica

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Wage hikes affect production costs and hence are usually analysed as supply shocks. There is a longstanding debate, however, about demand effects of wage variations. In this paper, we bring together these two arguments in a Kaldorian model with group-specific saving rates and a production technology that allows for redistribution between workers and entrepreneurs following a wage hike. We thereby pinpoint the conditions under which (a) wage variations affect aggregate demand and (b) the positive demand effects of wage hikes may even overcompensate the negative supply effects on aggregate employment ('purchasing power argument'). We conclude by noting that, whereas demand effects are very likely to occur, the conditions under which the purchasing power argument does indeed hold are very unrealistic.

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Socially optimal monetary policy institutions

Cited by 10 publications

References 27 publications

Towards a New Theory of Economic Policy: Continuity and Innovation

Towards a New Theory of Economic Policy: Continuity and Innovation

The Cost of Social Pacts

Wage Hikes as Supply and Demand Shock

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