Resource title

Has EMU had any impact on the degree of wage restraint?

Resource image

image for OpenScout resource :: Has EMU had any impact on the degree of wage restraint?

Resource description

We find in cross-sectional investigations that wage restraint is either unchanged or increased following EMU in the vast majority of countries. This contradicts the predictions of a widelycited family of models of labor market bargaining. In those, Germany would have been expected to display the greatest decline in wage restraint post-EMU, and we find no indication of such a decline. The time-series evidence on Italy shows a significant increase in wage restraint after eurozone entry. This pattern is consistent with the models that emphasise the gains from monetary credibility. The eurozone increase in wage restraint is matched by the increase seen in the UK and Sweden after adopting inflation targeting, another means to credibility.

Resource author

Adam S. Posen, Daniel Popov Gould

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/25828

Resource license

Adapt according to the presented license agreement and reference the original author.