Information Content of Wages and Monetary Policy

18 Pages Posted: 17 Dec 2004

See all articles by Volker Hahn

Volker Hahn

University of Konstanz

Hans Gersbach

ETH Zurich - CER-ETH -Center of Economic Reseaarch; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR)

Date Written: July 2004

Abstract

We examine whether it is sufficient for central banks to observe and forecast nominal variables only. Analyzing the interplay of wage-setting unions and a central bank we show that although central banks may not gain more information by directly acquiring data about indicators of real shocks in the economy, such activities are nevertheless beneficial for central banks and yield lower social losses. Moreover, the extent of research activities by central banks should depend on the process of union formation.

Keywords: Central Banks, Wage Bargaining, Information Asymmetries, Indicators for Monetary Policy, Controlling Inflation

JEL Classification: E50, E58, J51

Suggested Citation

Hahn, Volker and Gersbach, Hans, Information Content of Wages and Monetary Policy (July 2004). Available at SSRN: https://ssrn.com/abstract=633001 or http://dx.doi.org/10.2139/ssrn.633001

Volker Hahn (Contact Author)

University of Konstanz ( email )

Box 143
Konstanz, 78457
Germany

Hans Gersbach

ETH Zurich - CER-ETH -Center of Economic Reseaarch ( email )

Zürichbergstrasse 18
Zurich, 8092
Switzerland
+41 44 632 82 80 (Phone)
+41 44 632 18 30 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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