Is a Conservative Central Banker a (Perfect) Substitute for Wage Coordination?

13 Pages Posted: 22 Nov 2003

See all articles by Giovanni Di Bartolomeo

Giovanni Di Bartolomeo

Sapienza University of Rome, Department of Economics and Law

Nicola Acocella

University of Rome I - Department of Methods and Models for Economics, Territory and Finance (MEMOTEF)

Abstract

In a monetary union, macroeconomic policies are strongly associated with externalities that seem to imply the need for macroeconomic policy coordination. However, if coordination is not complete, partial coordination might be unable to cope with the negative externalities arising from a decentralized policy management. This paper investigates different solutions for internalizing policy externalities. In particular, we compare wage coordination to the conservative central banker solution, which is found by recent literature able to impose wage moderation to the labor unions. We also discuss some aspects related to labor flexibility reforms as a solution for the unemployment problem.

Keywords: Conservative central bank, budget constraints, wage coordination, monetary union

JEL Classification: E62, E64, F15, F42

Suggested Citation

Di Bartolomeo, Giovanni and Acocella, Nicola, Is a Conservative Central Banker a (Perfect) Substitute for Wage Coordination?. Available at SSRN: https://ssrn.com/abstract=471602 or http://dx.doi.org/10.2139/ssrn.471602

Giovanni Di Bartolomeo (Contact Author)

Sapienza University of Rome, Department of Economics and Law ( email )

via Castro del Laurenziano 9
Roma, 00191
Italy

Nicola Acocella

University of Rome I - Department of Methods and Models for Economics, Territory and Finance (MEMOTEF) ( email )

Via del Castro Laurenziano 9
Roma, Roma 00161
Italy
+390649766359 (Phone)

HOME PAGE: http://www.memotef.uniroma1.it/newdip/utenti/acocellanicola/

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