Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/159099 
Year of Publication: 
1996
Series/Report no.: 
Quaderni - Working Paper DSE No. 256
Publisher: 
Alma Mater Studiorum - Università di Bologna, Dipartimento di Scienze Economiche (DSE), Bologna
Abstract: 
If the wage indexation rate is chosen discretionarily, a Left hand government lowers it in order to increase the output effects of surprise inflation, while a Right hand government prefers high indexation. These choices magnify the differences between the inflation rates preferred by the two parties. When binding commitments before the signature of the labor contract are possible, both parties prefer a higher wage indexation with respect to the discretionary situation, in order to reduce the inflationary bias.
Persistent Identifier of the first edition: 
Creative Commons License: 
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Document Type: 
Working Paper

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