Chapter

Institutional and Sectoral Interactions in Monetary Policy and Wage/Price‐Bargaining

Robert J. Franzese

in Varieties of Capitalism

Published in print August 2001 | ISBN: 9780199247752
Published online November 2003 | e-ISBN: 9780191596346 | DOI: http://dx.doi.org/10.1093/0199247757.003.0003
 Institutional and Sectoral Interactions in Monetary Policy and Wage/Price‐Bargaining

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Considers institutional complementarities at the macroeconomic level. It examines unemployment and inflation management in developed democracies, stressing the interactions of central‐bank independence and wage/price‐bargaining coordination with each other and with the sectoral structure of bargaining in determining monetary—policymakers’ and wage/price‐bargainers’ incentives. The evidence from 21 developed democracies over 20 years of flexible exchange rates supports the argument that credible monetary conservatism and traded‐sector‐led (not public‐sector‐led) coordinated bargaining, complement in producing low unemployment and substitute in producing low inflation.

Keywords: central‐bank independence; coordinated wage‐bargaining; inflation; institutional interactions; macroeconomic policy; unemployment

Chapter.  15471 words.  Illustrated.

Subjects: Economic Systems

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