Review of Economic Studies Vol. 70 No. 4 2003
Strategic Monetary Policy with Non-Atomistic Wage Setters
Abstract
Monetary policy analyses usually assume an atomistic private sector, thereby ignoring potential interactions between policy and wage-setting decisions. Yet, non-atomistic wage setters are a key feature of several industrialized economies. We study the economic consequence of non-atomistic agents and show that this qualifies previous results on the effects and desirability of a conservative central banker. In particular, the central bank aversion to inflation may have a permanent effect on structural employment, while no such effect emerges with atomistic agents.
- DOI
- 10.1111/1467-937x.t01-1-00263
- Volume
- 70
- Issue
- 4
- Pages
- 909-919
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref