Di Bartolomeo, Giovanni and Tirelli, Patrizio and Acocella, Nicola (2008) Trend inflation as a workers disciplining device in a general equilibrium model. Working Paper. Dipartimento di Studi Geoeconomici, Linguistici, Statistici e Storici per l'Analisi regionale, Università di Roma La Sapienza, Roma, Italia, Roma. (Unpublished)
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Abstract
In New Keynesian models nominal rigidities determine socially inefficient outcomes. Our paper reverses this view: properly designed monetary policies may take advantage of predetermined nominal wages to discipline monopolistic wage setters. This, in turn, requires accepting a non-zero inflation rate. Discretionary monetary policy is effective when wage setters are non atomistic. Inflation targeting has real effects irrespective of the degree of labor market centralization.
| Item Type: | Monograph (Working Paper) |
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| Additional Information: | JEL Classification: E52, E58, J51; E24 |
| Uncontrolled Keywords: | Inflation bias, discretionary monetary policy, non-zero inflation targeting, unemployment, strategic wage setters |
| Subjects: | 300 Scienze sociali > 330 Economia |
| Depositing User: | Prof. Nicola Acocella |
| Date Deposited: | 16 Jul 2009 |
| Last Modified: | 20 May 2010 12:02 |
| URI: | http://eprints.bice.rm.cnr.it/id/eprint/987 |
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