The Experts below are selected from a list of 360 Experts worldwide ranked by ideXlab platform
Lars Calmfors - One of the best experts on this subject based on the ideXlab platform.
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nominal wage flexibility wage indexation and Monetary Union
The Economic Journal, 2006Co-Authors: Lars Calmfors, Asa JohanssonAbstract:Membership in a Monetary Union implies stronger incentives for nominal wage flexibility in the form of wage indexation and shorter contract length than non-membership. This counteracts the stabilisation policy cost of giving up Monetary independence. But more wage flexibility is only an imperfect substitute for an individual Monetary policy. It is possible that an increase in wage flexibility is welfare-decreasing because of the accompanying rise in price variability. The interaction between wage setting and central bank behaviour may result in either multiple equilibria or a unique full-indexation equilibrium.
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nominal wage flexibility wage indexation and Monetary Union
2002Co-Authors: Lars Calmfors, Asa JohanssonAbstract:Membership in a Monetary Union implies stronger incentives for nominal wage flexibility in the form of wage indexation and shorter contract length than nonmembership. For example, entry into a Monetary Union may cause a move from a non-indexation to an indexation equilibrium. But more wage flexibility is only an imperfect substitute for an own Monetary policy. It is possible that an increase in wage flexibility is welfare-decreasing because of the accompanying rise in price variability. The interaction between wage setting and central bank behaviour may result in either multiple equilibria or a unique full-indexation equilibrium.
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nominal wage flexibility wage indexation and Monetary Union
Seminar Papers, 2002Co-Authors: Lars Calmfors, Asa JohanssonAbstract:Membership in a Monetary Union (EMU) is likely to imply stronger incentives for nominal wage flexibility in the form of wage indexation and shorter contract length than non-membership. For example, EMU entry may cause a move from a nonindexation to an indexation equilibrium. But more wage flexibility is only an imperfect substitute for an own Monetary policy. It is possible that an increase in wage flexibility is welfare-decreasing, because of the accompanying rise in price variability. If indexation occurs outside the EMU, either multiple equilibria or full-indexation equilibria may occur.
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unemployment labor market reform and Monetary Union
Social Science Research Network, 1998Co-Authors: Lars CalmforsAbstract:The paper analyzes various mechanisms through which Monetary Union in Europe may affect unemployment. The focus is on the political incentives for labor-market reform. There will be more reform outside than inside the EMU to the extent that a national inflation bias can be reduced. But if there is a precautionary motive for low average unemployment in order to reduce the utility cost of macroeconomic variability, there could be more reform in Monetary Union. Labor-market reform to increase wage flexibility as a substitute for domestic Monetary policy and transition costs of reform are also analyzed. The net effect of Monetary Union on unemployment is ambigous.
George S. Tavlas - One of the best experts on this subject based on the ideXlab platform.
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wage rigidity and Monetary Union
The Economic Journal, 2005Co-Authors: Harris Dellas, George S. TavlasAbstract:We compare Monetary Union to flexible exchange rates in an asymmetric, threecountry model with active Monetary policy. Unlike the traditional OCA literature, we find that countries with a high degree of nominal wage rigidity benefit from Monetary Union, specially when they join other, similarly rigid countries. Countries with relatively more flexible wages tend to be worse off in Unions with countries that have more rigid wages. We examine France, Germany and the UK and find that the welfare implications of alternative Monetary arrangements depend more on the degree of wage asymmetry than on other types of asymmetries (in shocks, Monetary policy etc.). And that, higher degree of wage flexibility in the UK relative to France and Germany would make its participation in EMU costly.
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wage rigidity and Monetary Union
Diskussionsschriften, 2002Co-Authors: Harris Dellas, George S. TavlasAbstract:We compare Monetary Union to flexible exchange rates in an asymmetric, three- country model with active Monetary policy. Unlike the traditional OCA literature, we find that countries with high nominal wage rigidities benefit from Monetary Union, specially when they join other, similarly rigid countries. Countries with relatively more flexible wages lose when they form a Union with more rigid wage countries. We study the France, Germany and the UK and find that wage asymmetries across these three countries dominate other types of asymmetries (in shocks, Monetary policy etc.) in welfare comparisons. And that, if the UK had a substantially higher degree of wage flexibility than France and Germany, then her participation in EMU would be costly.
Asa Johansson - One of the best experts on this subject based on the ideXlab platform.
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nominal wage flexibility wage indexation and Monetary Union
The Economic Journal, 2006Co-Authors: Lars Calmfors, Asa JohanssonAbstract:Membership in a Monetary Union implies stronger incentives for nominal wage flexibility in the form of wage indexation and shorter contract length than non-membership. This counteracts the stabilisation policy cost of giving up Monetary independence. But more wage flexibility is only an imperfect substitute for an individual Monetary policy. It is possible that an increase in wage flexibility is welfare-decreasing because of the accompanying rise in price variability. The interaction between wage setting and central bank behaviour may result in either multiple equilibria or a unique full-indexation equilibrium.
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nominal wage flexibility wage indexation and Monetary Union
2002Co-Authors: Lars Calmfors, Asa JohanssonAbstract:Membership in a Monetary Union implies stronger incentives for nominal wage flexibility in the form of wage indexation and shorter contract length than nonmembership. For example, entry into a Monetary Union may cause a move from a non-indexation to an indexation equilibrium. But more wage flexibility is only an imperfect substitute for an own Monetary policy. It is possible that an increase in wage flexibility is welfare-decreasing because of the accompanying rise in price variability. The interaction between wage setting and central bank behaviour may result in either multiple equilibria or a unique full-indexation equilibrium.
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nominal wage flexibility wage indexation and Monetary Union
Seminar Papers, 2002Co-Authors: Lars Calmfors, Asa JohanssonAbstract:Membership in a Monetary Union (EMU) is likely to imply stronger incentives for nominal wage flexibility in the form of wage indexation and shorter contract length than non-membership. For example, EMU entry may cause a move from a nonindexation to an indexation equilibrium. But more wage flexibility is only an imperfect substitute for an own Monetary policy. It is possible that an increase in wage flexibility is welfare-decreasing, because of the accompanying rise in price variability. If indexation occurs outside the EMU, either multiple equilibria or full-indexation equilibria may occur.
Francesco Lippi - One of the best experts on this subject based on the ideXlab platform.
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Monetary Union with voluntary participation
The Review of Economic Studies, 2006Co-Authors: William Fuchs, Francesco LippiAbstract:A Monetary Union is modelled as a technology that makes a surprise policy deviation impossible and requires voluntarily participating countries to follow the same Monetary policy. Within a fully dynamic context, we show that such an arrangement may dominate a regime with independent national currencies. Two new results are delivered by the voluntary participation assumption. First, the optimal plan is shown to respond to a country's temptation to leave the Union by tilting both current and future policy in its favour. This yields a non-linear rule according to which each country weight in policy decisions is time-varying and depends on its incentive to abandon the Union. Second, we show that there might be conditions such that a break-up of the Union, as has occurred in some historical episodes, is efficient. The paper thus provides a first formal analysis of the incentives behind the formation, sustainability, and disruption of a Monetary Union.
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Monetary Union with voluntary participation
Research Papers in Economics, 2004Co-Authors: William Fuchs, Francesco LippiAbstract:A Monetary Union is modeled as a technology that makes a surprise policy deviation impossible but requires voluntarily participating countries to follow the same Monetary policy. Within a fully dynamic context, we identify conditions under which such arrangement may dominate a coordinated system with independent national currencies. Two new results are delivered by the voluntary participation assumption. First, optimal policy is shown to respond to the agentsi?½ incentives to leave the Union by tilting both current and future policy in their favor. This contrasts with the static nature of optimal policy when participation is exogenously assumed and implies that policy in the Union is not exclusively guided by area-wide developments but does occasionally take account of member countriesi?½ national developments. Second we show that there might exist states of the world in which the Union breaks apart, as occurred in some historical episodes. The paper thus provides a first formal analysis of the incentives behind the formation, sustainability and disruption of a Monetary Union.
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Monetary Union with voluntary participation
Social Science Research Network, 2003Co-Authors: William Fuchs, Francesco LippiAbstract:A Monetary Union is modelled as a technology that makes surprise devaluations impossible but requires voluntarily participating countries to follow the same Monetary policy. It is shown that for low discount factors and sufficiently correlated shocks welfare in the Union is higher than that achievable when countries coordinate while retaining their own independent policy. Optimal policy, when participation in the Union is voluntary, is characterized and shown to respond to agents' incentives to leave by tilting current and future policy in their favour. This contrasts with the static nature of optimal policy when participation is exogenously assumed. This finding implies that policy in the Union will not be exclusively guided by area-wide developments but will occasionally take account of member countries' national developments. Finally, we show that there might exist states of the world in which the Union breaks apart, as occurred in several historical episodes. The Paper thus provides a first formal analysis of the forces behind the formation, sustainability and disruption of a Monetary Union.
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labour markets and Monetary Union a strategic analysis
The Economic Journal, 2001Co-Authors: Alex Cukierman, Francesco LippiAbstract:This paper shows that the effects of a Monetary Union depend on several labour market features. In particular, the switch from national Monetary policies to a common Monetary policy usually affects both inflation and unemployment, even when all structural parameters of the economy and of Unions' and policymakers' preferences remain the same. The benchmark case of a Monetary Union between identical countries suggests that the switch to a Monetary Union is likely to make labour Unions more aggressive, increasing unemployment. Qualifications to this result are provided under alternative institutional scenarios, like cross-country asymmetries, (pre-Union) ERM membership and wage leadership.
Harris Dellas - One of the best experts on this subject based on the ideXlab platform.
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wage rigidity and Monetary Union
The Economic Journal, 2005Co-Authors: Harris Dellas, George S. TavlasAbstract:We compare Monetary Union to flexible exchange rates in an asymmetric, threecountry model with active Monetary policy. Unlike the traditional OCA literature, we find that countries with a high degree of nominal wage rigidity benefit from Monetary Union, specially when they join other, similarly rigid countries. Countries with relatively more flexible wages tend to be worse off in Unions with countries that have more rigid wages. We examine France, Germany and the UK and find that the welfare implications of alternative Monetary arrangements depend more on the degree of wage asymmetry than on other types of asymmetries (in shocks, Monetary policy etc.). And that, higher degree of wage flexibility in the UK relative to France and Germany would make its participation in EMU costly.
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wage rigidity and Monetary Union
Diskussionsschriften, 2002Co-Authors: Harris Dellas, George S. TavlasAbstract:We compare Monetary Union to flexible exchange rates in an asymmetric, three- country model with active Monetary policy. Unlike the traditional OCA literature, we find that countries with high nominal wage rigidities benefit from Monetary Union, specially when they join other, similarly rigid countries. Countries with relatively more flexible wages lose when they form a Union with more rigid wage countries. We study the France, Germany and the UK and find that wage asymmetries across these three countries dominate other types of asymmetries (in shocks, Monetary policy etc.) in welfare comparisons. And that, if the UK had a substantially higher degree of wage flexibility than France and Germany, then her participation in EMU would be costly.
