Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/28691
Authors: 
Lehment, Harmen
Year of Publication: 
1979
Citation: 
[Journal:] Weltwirtschaftliches Archiv [ISSN:] 0043-2636 [Place:] Tübingen [Publisher:] Mohr [Volume:] 115 [Year:] 1979 [Issue:] 2 [Pages:] 224-241
Abstract (Translated): 
Wage Policies and Employment under Fixed and Flexible Exchange Rates. - Under flexible exchange rates moderate wage policies lead to increased employment via an interaction between profitability and real-balance effects. The employment increase, which results from a lower nominal wage increase, is smaller than under fixed exchange rates. The reason for this difference is that moderate wage policies under fixed exchange rates cause an additional expansion in the money supply, thereby increasing the employment effects of the wage policies. If expectations vis-à-vis price and exchange rate changes are taken into consideration, it is not impossible that a small increase in domestic wages will cause a decrease in inflation expectations and an increase in the demand for the domestic currency. A drop in real demand thereby induced, could be counteracted by a monetary policy aiming at ensuring that the target inflation rate is not undershot.
Persistent Identifier of the first edition: 
Document Type: 
Article

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.