Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/75700
Authors: 
Holden, Steinar
Year of Publication: 
2001
Series/Report no.: 
CESifo Working Paper 429
Abstract: 
International comparisons show that countries with co-ordinated wage setting generally have lower unemployment than countries with less co-ordinated wage setting. This paper argues that the monetary regime may affect whether co-ordination among many wage setters is feasible. A strict monetary regime, like a country-specific inflation target, to some extent disciplines wage setters, so that the consequences of uncoordinated wage setting are less detrimental than under a more passive monetary regime (eg a monetary union). Thus, the gains from co-ordination are larger under a passive regime. Under some circumstances a passive regime may induce co-operation in wage setting, and thus lower unemployment, when a stricter regime would not.
Subjects: 
Wage setting
co-ordination
equilibrium unemployment
monetary regime
monetary union
wage moderation
Document Type: 
Working Paper

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