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Has EMU Had Any Impact on the Degree of Wage Restraint?

In: The Travails of the Eurozone

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  • Adam S. Posen
  • Daniel Popov Gould

Abstract

The Lucas Critique notwithstanding, applied economic research has paid a great deal of attention in recent decades to the potential for changes in monetary regimes to induce lasting changes in economic structures and behaviour. In particular, given the key role of inflation expectations in wage setting, and the presumed endogeneity of such practices as indexation to the price environment, theorists have developed increasingly sophisticated models of the interaction between central banking and labour market institutions.1 The creation of the euro presents a natural opportunity for the investigation of these models’ predictions. Economies that varied substantially in wage bargaining institutions and practices suddenly underwent a simultaneous shift in monetary regime.

Suggested Citation

  • Adam S. Posen & Daniel Popov Gould, 2007. "Has EMU Had Any Impact on the Degree of Wage Restraint?," Palgrave Macmillan Books, in: David Cobham (ed.), The Travails of the Eurozone, chapter 7, pages 146-178, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-0-230-80147-9_7
    DOI: 10.1057/9780230801479_7
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    References listed on IDEAS

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    Cited by:

    1. Sánchez, Marcelo, 2010. "Wage restraint and monetary union," Economic Modelling, Elsevier, vol. 27(1), pages 134-142, January.
    2. Gruener Hans Peter & Hayo Bernd & Hefeker Carsten, 2009. "Unions, Wage Setting and Monetary Policy Uncertainty," The B.E. Journal of Macroeconomics, De Gruyter, vol. 9(1), pages 1-25, October.
    3. Ulf Söderström, 2008. "Re-Evaluating Swedish Membership in EMU: Evidence from an Estimated Model," NBER Working Papers 14519, National Bureau of Economic Research, Inc.
    4. Mikosch, Heiner & Sturm, Jan-Egbert, 2012. "Has the EMU reduced wage growth and unemployment? Testing a model of trade union behavior," European Journal of Political Economy, Elsevier, vol. 28(1), pages 27-37.
    5. Vincenzo Cuciniello, 2014. "Monetary and Labor Interactions in a Monetary Union," International Journal of Central Banking, International Journal of Central Banking, vol. 10(4), pages 1-30, December.
    6. Nicolas Canry & Arnaud Lechevalier, 2006. "Wage share variations in France and Germany since 1970: what does really matter?," Post-Print halshs-00140529, HAL.
    7. Carsten Hefeker, 2006. "The monetary policy consequences of enlargement," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 7(04), pages 29-34, December.
    8. Sánchez, Marcelo, 2008. "Monetary stabilisation in a currency union of small open economies," Working Paper Series 927, European Central Bank.
    9. Carsten Hefeker, 2006. "The monetary policy consequences of enlargement," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 7(4), pages 29-34, December.
    10. Tyrowicz, Joanna, 2009. "When Eastern Labour Markets Enter Western Europe CEECs. Labour Market Institutions upon Euro Zone Accession," MPRA Paper 15045, University Library of Munich, Germany.
    11. Moïse Sidiropoulos & Blandine Zimmer, 2009. "Monetary Union Enlargement, Fiscal Policy, and Strategic Wage Setting," Review of International Economics, Wiley Blackwell, vol. 17(3), pages 631-649, August.
    12. Ulf Söderström, 2010. "Reevaluating Swedish Membership in the European Monetary Union: Evidence from an Estimated Model," NBER Chapters, in: Europe and the Euro, pages 379-414, National Bureau of Economic Research, Inc.
    13. Sánchez, Marcelo, 2009. "National prices and wage setting in a currency union," Working Paper Series 1058, European Central Bank.
    14. Nicolas Canry & Arnaud Lechevalier, 2006. "Wage share variations in France and Germany since 1970: what does really matter?," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00140529, HAL.
    15. Paul Ramskogler, 2013. "The National–Transnational Wage-Setting Nexus in Europe: What have We Learned from the Early Years of Monetary Integration?," Journal of Common Market Studies, Wiley Blackwell, vol. 51(5), pages 916-930, September.

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    More about this item

    Keywords

    Monetary Policy; Central Bank; Productivity Growth; Real Wage; Wage Growth;
    All these keywords.

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • J58 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Public Policy

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