The Clash of Central Bankers with Labour Market Insiders, and the Persistence of Inflation and Unemployment
Bibliographic Data
| ID | 9723169 |
|---|---|
| Authors | George Alogoskoufis (0000-0001-6196-6325, Fletcher School, Tufts University and Athens University of Economics and Business, corresponding author) |
| Year | 2018 |
| Volume | 85 |
| Issue | 337 |
| Pages | 152-176 |
| Publication date | 2018-01-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Economica (JOURNAL) |
| Journal identifiers | ISSN: 0013-0427 • E-ISSN: 1468-0335 |
| Publisher | Wiley (PUBLISHER • GB) |
| DOI | 10.1111/ecca.12241 |
| OpenAlex | W2615551146 |
| Language | EN |
| Citations received | 1 |
| References cited | 20 |
This paper analyses the implications of monetary policy for the dynamic behaviour of inflation, in a ‘natural’ rate model characterized by endogenous unemployment persistence. We present evidence for the main industrial economies that suggests that inflation displays persistence which is of the same order of magnitude as the persistence of deviations of unemployment from its ‘natural’ rate. We provide a theoretical explanation of this fact based on a model of the dynamic interactions between central bankers and labour market insiders. The clash in the objectives of central bankers and labour market insiders is what causes both inflation and unemployment to display the same persistence in this model. The analysis suggests that inflation persistence could be addressed in a welfare‐improving way, if central banks adopted monetary policy rules that targeted unanticipated changes in unemployment rates instead of deviations of unemployment from its ‘natural’ rate
Central bank · Economics · Full employment · Inflation (cosmology) · Inflation targeting · Keynesian economics · Labour economics · Macroeconomics · Market economy · Misery index · Monetary economics · Monetary policy · Natural rate of unemployment · Persistence (discontinuity) · Unemployment · Unemployment rate · Welfare · Economic Theory and Policy · Global Financial Crisis and Policies · Monetary Policy and Economic Impact
Discretion versus policy rules in practice
Postwar U.S. Business Cycles
The Science of Monetary Policy
Staggered prices in a utility-maximizing framework
The Optimal Degree of Commitment to an Intermediate Monetary Target
Insiders, Outsiders, and Nominal Wage Contracts
Long-Term Contracts, Rational Expectations, and the Optimal Money Supply Rule
Rules Rather than Discretion
A Positive Theory of Monetary Policy in a Natural Rate Model
Insider Power, Unemployment Dynamics and Multiple Inflation Equilibria
Designing Monetary Policy when Unemployment Persists
Monetary Accommodation, Exchange Rate Regimes and Inflation Persistence
Wage Formation and the Persistence of Unemployment
| Unique citing works | 1 |
|---|---|
| Citations per year | 1 |
| Citation span | 2025 - 2025 (1) |
| Citation velocity | recent |
| Highly cited | No |
| Citation types | Neutral: 1 |