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Author: Helge Berger Publisher: ISBN: Category : Languages : en Pages : 30
Book Description
The conservative central banker has come under attack recently. On the basis of models in which there is explicit interaction between trade union behavior and monetary policy, it has been argued that if 'trade unions' are averse to inflation, welfare will be lower with a conservative than with a liberal central bank. We reframe this discussion in a standard trade union model. We show that the case against the conservative central banker rests exclusively on the assumption of a strictly nominal outside option (for instance, unemployment benefits) for the union. There is no welfare gain associated with making the central bank less conservative than society, however, if the outside option is in real terms. As the nominal components of the trade union's outside option are mainly public transfers, we also show that the conservative central banker is always optimal if the government can choose the level of nominal unemployment benefits as well as the degree of central bank conservatism.
Author: Helge Berger Publisher: International Monetary Fund ISBN: Category : Business & Economics Languages : en Pages : 36
Book Description
The "conservative central banker" has come under attack recently. On the basis of models in which there is explicit interaction between trade union behavior and monetary policy, it has been argued that if 'trade unions' are averse to inflation, welfare will be lower with a conservative than with a liberal central bank. We reframe this discussion in a standard trade union model. We show that the case against the conservative central banker rests exclusively on the assumption of a strictly nominal outside option (for instance, unemployment benefits) for the union. There is no welfare gain associated with making the central bank less conservative than society, however, if the outside option is in real terms. As the nominal components of the trade union's outside option are mainly public transfers, we also show that the conservative central banker is always optimal if the government can choose the level of nominal unemployment benefits as well as the degree of central bank conservatism.
Author: Helge Berger Publisher: ISBN: Category : Languages : en Pages : 30
Book Description
The conservative central banker has come under attack recently. On the basis of models in which there is explicit interaction between trade union behavior and monetary policy, it has been argued that if 'trade unions' are averse to inflation, welfare will be lower with a conservative than with a liberal central bank. We reframe this discussion in a standard trade union model. We show that the case against the conservative central banker rests exclusively on the assumption of a strictly nominal outside option (for instance, unemployment benefits) for the union. There is no welfare gain associated with making the central bank less conservative than society, however, if the outside option is in real terms. As the nominal components of the trade union's outside option are mainly public transfers, we also show that the conservative central banker is always optimal if the government can choose the level of nominal unemployment benefits as well as the degree of central bank conservatism.
Author: International Monetary Fund. Research Dept. Publisher: International Monetary Fund ISBN: 9781589063518 Category : Business & Economics Languages : en Pages : 216
Book Description
This paper tests uncovered interest parity (UIP) using interest rates on longer maturity bonds for the Group of Seven countries. These long-horizon regressions yield much more support for UIP—all of the coefficients on interest differentials are of the correct sign, and almost all are closer to the UIP value of unity than to zero. The paper also analyzes the decision by a government facing electoral uncertainty to implement structural reforms in the presence of fiscal restraints similar to the Stability and Growth Pact.
Author: Robert Franzese Publisher: Springer Science & Business Media ISBN: 147574062X Category : Business & Economics Languages : en Pages : 276
Book Description
This important collection presents an authoritative selection of papers on "Institutional Conflicts and Complementarities" This publication is intent on building bridges between economics and the other social sciences. The focus is on the interaction between monetary policy and wage bargaining institutions in European Monetary Union (EMU). Institutional Conflicts and Complementarities is written by acknowledged experts in their field. The outcome is a broad analysis of the interactions of labour market actors and central banks. The volume addresses the recent changes in EMU. An important theoretical, empirical, and policy-relevant conclusion that emerges from Institutional Conflicts and Complementarities is that even perfectly credible monetary conservatism has long-term real effects, even in equilibrium models with fully rational expectations.
Author: Mr.Marcello M. Estevão Publisher: International Monetary Fund ISBN: 147552014X Category : Business & Economics Languages : en Pages : 29
Book Description
Even though institutions are created to protect workers, they may interfere with labor market functioning, raise unemployment, and end up being circumvented by informal contracts. This paper uses Brazilian microeconomic data to show that the institutional changes introduced by the 1988 Constitution lowered the sensitivity of real wages to changes in labor market slack and could have contributed to the ensuing higher rates of unemployment in the country. Moreover, the paper shows that states that faced higher increases in informality (i.e., illegal work contracts) following the introduction of the new Constitution tended to have smaller drops in wage responsiveness to macroeconomic conditions, thus suggesting that informality serves as a escape valve to an over-regulated environment.
Author: Davide Debortoli Publisher: International Monetary Fund ISBN: 1484311752 Category : Business & Economics Languages : en Pages : 56
Book Description
Yes, it makes a lot of sense. This paper studies how to design simple loss functions for central banks, as parsimonious approximations to social welfare. We show, both analytically and quantitatively, that simple loss functions should feature a high weight on measures of economic activity, sometimes even larger than the weight on inflation. Two main factors drive our result. First, stabilizing economic activity also stabilizes other welfare relevant variables. Second, the estimated model features mitigated inflation distortions due to a low elasticity of substitution between monopolistic goods and a low interest rate sensitivity of demand. The result holds up in the presence of measurement errors, with large shocks that generate a trade-off between stabilizing inflation and resource utilization, and also when ensuring a low probability of hitting the zero lower bound on interest rates.
Author: Torsten Persson Publisher: MIT Press ISBN: 0262303663 Category : Business & Economics Languages : en Pages : 503
Book Description
What determines the size and form of redistributive programs, the extent and type of public goods provision, the burden of taxation across alternative tax bases, the size of government deficits, and the stance of monetary policy during the course of business and electoral cycles? A large and rapidly growing literature in political economics attempts to answer these questions. But so far there is little consensus on the answers and disagreement on the appropriate mode of analysis. Combining the best of three separate traditions—the theory of macroeconomic policy, public choice, and rational choice in political science—Torsten Persson and Guido Tabellini suggest a unified approach to the field. As in modern macroeconomics, individual citizens behave rationally, their preferences over economic outcomes inducing preferences over policy. As in public choice, the delegation of policy decisions to elected representatives may give rise to agency problems between voters and politicians. And, as in rational choice, political institutions shape the procedures for setting policy and electing politicians. The authors outline a common method of analysis, establish several new results, and identify the main outstanding problems.
Author: Helge Berger
Author: Helge Berger
Author: Helge Berger
Author: International Monetary Fund. Research Dept.
Author: Robert Franzese
Author: Mr.Marcello M. Estevão
Author: Davide Debortoli
Author: James McHugh
Author: Torsten Persson
Author: Anssi Rantala
Author: J. O. Adésn