Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5068328 | European Journal of Political Economy | 2010 | 11 Pages |
Abstract
The paper investigates the implications of disclosure by the central bank to the private sector of information relating to the current realizations of macroeconomic disturbances. In the context of an economy in which the goods market is monopolistically competitive and where wages are set by atomistic unions, we find that greater precision of information provided to wage setters in respect of supply shocks has ambiguous welfare effects, both from the perspective of the social loss function and from the viewpoint of unions who act on the information. An important feature of the model is an externality in union wage setting which implies the outcome of the wage determination process is collectively inefficient.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Jonathan G. James, Phillip Lawler,