Wage Indexation And Political Cycles

Scorcu, Antonello Eugenio (1996) Wage Indexation And Political Cycles. Bologna: Dipartimento di Scienze economiche DSE, p. 13. DOI 10.6092/unibo/amsacta/5054. In: Quaderni - Working Paper DSE (256). ISSN 2282-6483.
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Abstract

If the wage indexation rate is chosen discretionarily, a Left hand government lowers it in order to increase the output effects of surprise inflation, while a Right hand government prefers high indexation. These choices magnify the differences between the inflation rates preferred by the two parties. When binding commitments before the signature of the labor contract are possible, both parties prefer a higher wage indexation with respect to the discretionary situation, in order to reduce the inflationary bias.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Scorcu, Antonello Eugenio
Keywords
wage indexation, electoral cycle, monetary policy, time consistency
Subjects
ISSN
2282-6483
DOI
Deposit date
04 Apr 2016 15:16
Last modified
25 Jul 2016 07:59
URI

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