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Is a conservative central banker a (perfect) substitute for wage coordination?

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  • Nicola Acocella

    (University of Rome La Sapienza)

  • Giovanni Di Bartolomeo

    (University of Rome La Sapienza)

Abstract

In a monetary union, macroeconomic policies are strongly associated with externalities that seem to imply the need for macroeconomic policy coordination. However, if coordination is not complete, partial coordination might be unable to cope with the negative externalities arising from a decentralized policy management. This paper investigates different solutions for internalizing policy externalities. In particular, we compare wage coordination to the conservative central banker solution, which is found by recent literature able to impose wage moderation to the labor unions. We also discuss some aspects related to labor flexibility reforms as a solution for the unemployment problem.

Suggested Citation

  • Nicola Acocella & Giovanni Di Bartolomeo, 2003. "Is a conservative central banker a (perfect) substitute for wage coordination?," Macroeconomics 0307011, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpma:0307011
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    Cited by:

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    More about this item

    Keywords

    Conservative central bank budget constraints wage coordination monetary union;

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • E64 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Incomes Policy; Price Policy
    • F15 - International Economics - - Trade - - - Economic Integration
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission

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