Monetary Regimes, Labour Mobility and Equilibrium Employment
2011 (English)In: Economic Modelling, ISSN 0264-9993, E-ISSN 1873-6122, Vol. 28, no 1-2, 396-403 p.Article in journal (Refereed) Published
A recent literature suggests that when wage setters are non-atomistic, strategic interaction between trade unions and the central bank may cause the monetary regime to matter for the labour market outcome, see Cukierman and Lippi (1999), Soskice and Iversen (2000), Vartiainen (2002), Holden (2003), Lippi (2003), Corricelli et al. (2006), Gnocchi (2006) and references therein. I show that when perfect labour mobility is introduced in a game between large wage setters and the central bank in a small open economy, the monetary regime is of no importance for real wages, employment or profits. The result suggests that if labour mobility is sufficiently high, worker migration is likely to mitigate the labour market effects of monetary regimes over time.
Place, publisher, year, edition, pages
2011. Vol. 28, no 1-2, 396-403 p.
Inflation targeting, Monetary union, Labour mobility, Neutrality of money
IdentifiersURN: urn:nbn:se:su:diva-53619ISI: 000286688900041OAI: oai:DiVA.org:su-53619DiVA: diva2:391045