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Wage Setters, Central Bank Conservatism and Economic Performance

Author

Listed:
  • Clemente De Lucia

    (ISAE - Institute for Studies and Economic Analyses)

Abstract

This work analyses the relationship among wage setters, Central Bank conservatism and economic performance. The main findings are that we can not confirm the so called Calmfors-Driffill effect. Key parameter is the elasticity of substitution between labor types, or , which affects the unions' market power. It emerges that with high values of decentralized economies, rather than centralized ones, face lower levels of inflation and unemployment. The opposite occurs with low values of . Dealing with the conservatism of the Central Bank, the paper shows that an ultra conservative central banker, rather than a populist one is able to maximize the welfare of a society.

Suggested Citation

  • Clemente De Lucia, 2003. "Wage Setters, Central Bank Conservatism and Economic Performance," ISAE Working Papers 34, ISTAT - Italian National Institute of Statistics - (Rome, ITALY).
    • Handle: RePEc:isa:wpaper:34
    as

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    References listed on IDEAS

    as
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    7. Lippi, Francesco, 2002. "Revisiting the case for a populist central banker," European Economic Review, Elsevier, vol. 46(3), pages 601-612, March.
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    More about this item

    Keywords

    Key Words: Non Atomistic Agents; Conservatism; Wage Bargaining;
    All these keywords.

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining

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