Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/152924
Authors: 
Grüner, Hans Peter
Hayo, Bernd
Hefeker, Carsten
Year of Publication: 
2005
Series/Report no.: 
ECB Working Paper 490
Abstract: 
Recent theoretical research has studied extensively the link between wage setting and monetary policymaking in unionized economies. This paper addresses the question of the role of monetary uncertainty from both an empirical and theoretical point of view. Our analysis is based on a simple model that derives the influence of monetary uncertainty on unionized wage setting. We construct an indicator of monetary policy uncertainty and test our model with data for the G5 countries. The central finding is that monetary policy uncertainty has a negative impact on nominal wage growth in countries where wage setting is relatively centralized. This result is consistent with recent theoretical approaches to central bank transparency and wage setting.
Subjects: 
centralized wage setting
Monetary policy uncertainty
union behavior
JEL: 
E58
Document Type: 
Working Paper

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