Author: Mr.Esteban Jadresic
Publisher: International Monetary Fund
Published: 1996-05
Total Pages: 44
ISBN-13:
DOWNLOAD EBOOKWhile 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.