Wage Indexation and Macroeconomic Stability

Wage Indexation and Macroeconomic Stability

Author: Mr.Esteban Jadresic

Publisher: International Monetary Fund

Published: 1996-11-01

Total Pages: 24

ISBN-13: 1451854331

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Since the seminal papers by Gray (1976) and Fischer (1977) were published, the major theorem of the wage indexation literature has been that indexing wages stabilizes output when shocks are nominal and destabilizes output when shocks are real. This paper reexamines the validity of this proposition taking into account the lags in actual indexation practices in an economy similar to that originally considered by those authors. It shows that in such a setup, wage contracts indexed to lagged inflation tend to destabilize output regardless of whether shocks are nominal or real.


Book Synopsis Wage Indexation and Macroeconomic Stability by : Mr.Esteban Jadresic

Download or read book Wage Indexation and Macroeconomic Stability written by Mr.Esteban Jadresic and published by International Monetary Fund. This book was released on 1996-11-01 with total page 24 pages. Available in PDF, EPUB and Kindle. Book excerpt: Since the seminal papers by Gray (1976) and Fischer (1977) were published, the major theorem of the wage indexation literature has been that indexing wages stabilizes output when shocks are nominal and destabilizes output when shocks are real. This paper reexamines the validity of this proposition taking into account the lags in actual indexation practices in an economy similar to that originally considered by those authors. It shows that in such a setup, wage contracts indexed to lagged inflation tend to destabilize output regardless of whether shocks are nominal or real.

Wage Indexation and Macroeconomic Stability

Wage Indexation and Macroeconomic Stability

Author: Esteban Jadresic

Publisher:

Published: 2006

Total Pages: 24

ISBN-13:

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Since the seminal papers by Gray (1976) and Fischer (1977) were published, the major theorem of the wage indexation literature has been that indexing wages stabilizes output when shocks are nominal and destabilizes output when shocks are real. This paper reexamines the validity of this proposition taking into account the lags in actual indexation practices in an economy similar to that originally considered by those authors. It shows that in such a setup, wage contracts indexed to lagged inflation tend to destabilize output regardless of whether shocks are nominal or real.


Book Synopsis Wage Indexation and Macroeconomic Stability by : Esteban Jadresic

Download or read book Wage Indexation and Macroeconomic Stability written by Esteban Jadresic and published by . This book was released on 2006 with total page 24 pages. Available in PDF, EPUB and Kindle. Book excerpt: Since the seminal papers by Gray (1976) and Fischer (1977) were published, the major theorem of the wage indexation literature has been that indexing wages stabilizes output when shocks are nominal and destabilizes output when shocks are real. This paper reexamines the validity of this proposition taking into account the lags in actual indexation practices in an economy similar to that originally considered by those authors. It shows that in such a setup, wage contracts indexed to lagged inflation tend to destabilize output regardless of whether shocks are nominal or real.

The Macroeconomic Consequences of Wage Indexation Revisited

The Macroeconomic Consequences of Wage Indexation Revisited

Author: Mr.Esteban Jadresic

Publisher: International Monetary Fund

Published: 1998-02-01

Total Pages: 55

ISBN-13: 1451843232

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Since the mid-1970s, there has been considerable research on the macroeconomic consequences of wage indexation. Nonetheless, until recently, this research had not explicitly explored the implications of contracts that index wages to lagged inflation, the usual type of wage indexation observed in practice. Drawing mainly on recent research by the author, this paper examines the consequences of wage indexation to lagged inflation on aggregate wage formation, the cost of disinflation under money- and exchange-rate-based stabilization, the variability of output under alternative shocks and policy regimes, the choice of exchange rate regime, and the level and variability of inflation.


Book Synopsis The Macroeconomic Consequences of Wage Indexation Revisited by : Mr.Esteban Jadresic

Download or read book The Macroeconomic Consequences of Wage Indexation Revisited written by Mr.Esteban Jadresic and published by International Monetary Fund. This book was released on 1998-02-01 with total page 55 pages. Available in PDF, EPUB and Kindle. Book excerpt: Since the mid-1970s, there has been considerable research on the macroeconomic consequences of wage indexation. Nonetheless, until recently, this research had not explicitly explored the implications of contracts that index wages to lagged inflation, the usual type of wage indexation observed in practice. Drawing mainly on recent research by the author, this paper examines the consequences of wage indexation to lagged inflation on aggregate wage formation, the cost of disinflation under money- and exchange-rate-based stabilization, the variability of output under alternative shocks and policy regimes, the choice of exchange rate regime, and the level and variability of inflation.

Macroeconomic Performance Under Alternative Exchange Rate Regimes

Macroeconomic Performance Under Alternative Exchange Rate Regimes

Author: Mr.Esteban Jadresic

Publisher: International Monetary Fund

Published: 1998-08-01

Total Pages: 36

ISBN-13: 145194103X

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This paper reexamines the macroeconomic effects of wage indexation in an open economy under alternative exchange rate regimes. The main finding is that, once the lags in actual indexation rules are considered, wage indexation affects output behavior substantially less than posited in the previous academic literature. This result implies that the academic view that wage indexation makes a flexible exchange rate generally preferable is unwarranted and suggests that the choice of exchange rate regime with and without wage indexation depends on similar factors. The analysis also reveals that the net effects of wage indexation on macroeconomic stability are ambiguous.


Book Synopsis Macroeconomic Performance Under Alternative Exchange Rate Regimes by : Mr.Esteban Jadresic

Download or read book Macroeconomic Performance Under Alternative Exchange Rate Regimes written by Mr.Esteban Jadresic and published by International Monetary Fund. This book was released on 1998-08-01 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper reexamines the macroeconomic effects of wage indexation in an open economy under alternative exchange rate regimes. The main finding is that, once the lags in actual indexation rules are considered, wage indexation affects output behavior substantially less than posited in the previous academic literature. This result implies that the academic view that wage indexation makes a flexible exchange rate generally preferable is unwarranted and suggests that the choice of exchange rate regime with and without wage indexation depends on similar factors. The analysis also reveals that the net effects of wage indexation on macroeconomic stability are ambiguous.

The Effects of Forward-Versus Backward-Looking Wage Indexationon Price Stabilization Programs

The Effects of Forward-Versus Backward-Looking Wage Indexationon Price Stabilization Programs

Author: Mr.Joe Crowley

Publisher: International Monetary Fund

Published: 1997-04-01

Total Pages: 35

ISBN-13: 1451845650

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A standard open-economy model is used to show that price stabilization programs are more likely to succeed if labor contracts specify forward-looking wage indexation. Compared with contracts specifying backward-looking wage indexation or wages based on static expectations, such contracts will result in a greater reduction in inflation with lower output costs, smaller misalignment of real wages, smaller outflows of reserves, smaller disruptions caused by policy announcements, and a reduced impact of some shocks during price stabilization programs. These results are generally true whether or not capital is mobile and whether or not expectations are rational.


Book Synopsis The Effects of Forward-Versus Backward-Looking Wage Indexationon Price Stabilization Programs by : Mr.Joe Crowley

Download or read book The Effects of Forward-Versus Backward-Looking Wage Indexationon Price Stabilization Programs written by Mr.Joe Crowley and published by International Monetary Fund. This book was released on 1997-04-01 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: A standard open-economy model is used to show that price stabilization programs are more likely to succeed if labor contracts specify forward-looking wage indexation. Compared with contracts specifying backward-looking wage indexation or wages based on static expectations, such contracts will result in a greater reduction in inflation with lower output costs, smaller misalignment of real wages, smaller outflows of reserves, smaller disruptions caused by policy announcements, and a reduced impact of some shocks during price stabilization programs. These results are generally true whether or not capital is mobile and whether or not expectations are rational.

Trade Unions, Wage Formation and Macroeconomic Stability

Trade Unions, Wage Formation and Macroeconomic Stability

Author: Lars Calmfors

Publisher: Springer

Published: 2016-02-10

Total Pages: 328

ISBN-13: 1349085960

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Book Synopsis Trade Unions, Wage Formation and Macroeconomic Stability by : Lars Calmfors

Download or read book Trade Unions, Wage Formation and Macroeconomic Stability written by Lars Calmfors and published by Springer. This book was released on 2016-02-10 with total page 328 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Incomes Policy

Incomes Policy

Author: Fouad Sabry

Publisher: One Billion Knowledgeable

Published: 2024-01-21

Total Pages: 253

ISBN-13:

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What is Incomes Policy Incomes policies in economics are economy-wide wage and price controls, most commonly instituted as a response to inflation, and usually seeking to establish wages and prices below free market level. How you will benefit (I) Insights, and validations about the following topics: Chapter 1: Incomes policy Chapter 2: Inflation Chapter 3: Full employment Chapter 4: New Keynesian economics Chapter 5: Phillips curve Chapter 6: Economic Stabilization Act of 1970 Chapter 7: Built-in inflation Chapter 8: National income policy agreement (Finland) Chapter 9: Price controls Chapter 10: 1973 Australian referendum (Incomes) Chapter 11: Fiscalism Chapter 12: Nixon shock Chapter 13: Prices and Incomes Accord Chapter 14: General Maximum Chapter 15: Vuskovic plan Chapter 16: Nixonomics Chapter 17: Demand-led growth Chapter 18: NAIRU Chapter 19: 1973-1975 recession Chapter 20: Hyperinflation in Brazil Chapter 21: Impact of the Korean War on the economy of the United States (II) Answering the public top questions about incomes policy. (III) Real world examples for the usage of incomes policy in many fields. Who this book is for Professionals, undergraduate and graduate students, enthusiasts, hobbyists, and those who want to go beyond basic knowledge or information for any kind of Incomes Policy.


Book Synopsis Incomes Policy by : Fouad Sabry

Download or read book Incomes Policy written by Fouad Sabry and published by One Billion Knowledgeable. This book was released on 2024-01-21 with total page 253 pages. Available in PDF, EPUB and Kindle. Book excerpt: What is Incomes Policy Incomes policies in economics are economy-wide wage and price controls, most commonly instituted as a response to inflation, and usually seeking to establish wages and prices below free market level. How you will benefit (I) Insights, and validations about the following topics: Chapter 1: Incomes policy Chapter 2: Inflation Chapter 3: Full employment Chapter 4: New Keynesian economics Chapter 5: Phillips curve Chapter 6: Economic Stabilization Act of 1970 Chapter 7: Built-in inflation Chapter 8: National income policy agreement (Finland) Chapter 9: Price controls Chapter 10: 1973 Australian referendum (Incomes) Chapter 11: Fiscalism Chapter 12: Nixon shock Chapter 13: Prices and Incomes Accord Chapter 14: General Maximum Chapter 15: Vuskovic plan Chapter 16: Nixonomics Chapter 17: Demand-led growth Chapter 18: NAIRU Chapter 19: 1973-1975 recession Chapter 20: Hyperinflation in Brazil Chapter 21: Impact of the Korean War on the economy of the United States (II) Answering the public top questions about incomes policy. (III) Real world examples for the usage of incomes policy in many fields. Who this book is for Professionals, undergraduate and graduate students, enthusiasts, hobbyists, and those who want to go beyond basic knowledge or information for any kind of Incomes Policy.

The Management of an Open Economy with "100% Plus" Wage Indexation

The Management of an Open Economy with

Author: Franco Modigliani

Publisher:

Published: 1978

Total Pages: 52

ISBN-13:

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Book Synopsis The Management of an Open Economy with "100% Plus" Wage Indexation by : Franco Modigliani

Download or read book The Management of an Open Economy with "100% Plus" Wage Indexation written by Franco Modigliani and published by . This book was released on 1978 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt:

The Great Inflation

The Great Inflation

Author: Michael D. Bordo

Publisher: University of Chicago Press

Published: 2013-06-28

Total Pages: 545

ISBN-13: 0226066959

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Controlling inflation is among the most important objectives of economic policy. By maintaining price stability, policy makers are able to reduce uncertainty, improve price-monitoring mechanisms, and facilitate more efficient planning and allocation of resources, thereby raising productivity. This volume focuses on understanding the causes of the Great Inflation of the 1970s and ’80s, which saw rising inflation in many nations, and which propelled interest rates across the developing world into the double digits. In the decades since, the immediate cause of the period’s rise in inflation has been the subject of considerable debate. Among the areas of contention are the role of monetary policy in driving inflation and the implications this had both for policy design and for evaluating the performance of those who set the policy. Here, contributors map monetary policy from the 1960s to the present, shedding light on the ways in which the lessons of the Great Inflation were absorbed and applied to today’s global and increasingly complex economic environment.


Book Synopsis The Great Inflation by : Michael D. Bordo

Download or read book The Great Inflation written by Michael D. Bordo and published by University of Chicago Press. This book was released on 2013-06-28 with total page 545 pages. Available in PDF, EPUB and Kindle. Book excerpt: Controlling inflation is among the most important objectives of economic policy. By maintaining price stability, policy makers are able to reduce uncertainty, improve price-monitoring mechanisms, and facilitate more efficient planning and allocation of resources, thereby raising productivity. This volume focuses on understanding the causes of the Great Inflation of the 1970s and ’80s, which saw rising inflation in many nations, and which propelled interest rates across the developing world into the double digits. In the decades since, the immediate cause of the period’s rise in inflation has been the subject of considerable debate. Among the areas of contention are the role of monetary policy in driving inflation and the implications this had both for policy design and for evaluating the performance of those who set the policy. Here, contributors map monetary policy from the 1960s to the present, shedding light on the ways in which the lessons of the Great Inflation were absorbed and applied to today’s global and increasingly complex economic environment.

Wage Indexation and the Cost of Disinflation

Wage Indexation and the Cost of Disinflation

Author: Mr.Esteban Jadresic

Publisher: International Monetary Fund

Published: 1996-05

Total Pages: 44

ISBN-13:

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While a standard academic presumption has been that wage indexation reduces the cost of disinflation, policymakers generally contend that wage indexing makes disinflation more difficult. To shed light on these views, this paper reexamines the effects of wage indexing on the output loss caused by money-based stabilization. It finds that the cost of disinflation with indexed wage contracts tends to be smaller than that with contracts that specify preset time-varying wages, but larger than that with contracts that specify fixed wages. Thus the academic and policymakers views can be both appropriate depending on the standard of reference.


Book Synopsis Wage Indexation and the Cost of Disinflation by : Mr.Esteban Jadresic

Download or read book Wage Indexation and the Cost of Disinflation written by Mr.Esteban Jadresic and published by International Monetary Fund. This book was released on 1996-05 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: While a standard academic presumption has been that wage indexation reduces the cost of disinflation, policymakers generally contend that wage indexing makes disinflation more difficult. To shed light on these views, this paper reexamines the effects of wage indexing on the output loss caused by money-based stabilization. It finds that the cost of disinflation with indexed wage contracts tends to be smaller than that with contracts that specify preset time-varying wages, but larger than that with contracts that specify fixed wages. Thus the academic and policymakers views can be both appropriate depending on the standard of reference.