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Macroeconomic Policy and the Current Account in an Open Economy with Partial Wage Indexation

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  • J. D. PITCHFORD

Abstract

In Australia the practice of partially indexing wages has become an art form. While open economy macroeconomics has been extended by various authors to the indexed wage case, none highlights the distinctive effects of partial indexation. This paper examines short‐and long‐run consequences of partial indexation. The standard conclusions that partial indexation is conducive to growth and that fiscal policy with partial indexation is expansionary are seriously questioned

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  • J. D. Pitchford, 1990. "Macroeconomic Policy and the Current Account in an Open Economy with Partial Wage Indexation," The Economic Record, The Economic Society of Australia, vol. 66(2), pages 157-170, June.
    • Handle: RePEc:bla:ecorec:v:66:y:1990:i:2:p:157-170
    DOI: 10.1111/j.1475-4932.1990.tb01715.x
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    References listed on IDEAS

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    1. Pitchford, J. D., 1989. "Optimum borrowing and the current account when there are fluctuations in income," Journal of International Economics, Elsevier, vol. 26(3-4), pages 345-358, May.
    2. Dornbusch, Rudiger & Fischer, Stanley, 1980. "Exchange Rates and the Current Account," American Economic Review, American Economic Association, vol. 70(5), pages 960-971, December.
    3. McKinnon, Ronald I, 1981. "The Exchange Rate and Macroeconomic Policy: Changing Postwar Perceptions," Journal of Economic Literature, American Economic Association, vol. 19(2), pages 531-557, June.
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    Cited by:

    1. Wen-Ya Chang & Ching-Chong Lai, 2002. "The Policy Assignment Principle with Wage Indexation," The American Economist, Sage Publications, vol. 46(2), pages 80-87, October.

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