Fiscal and monetary interactions when wage-setters are large: is there a role for corporatist policies?

摘要: This paper studies the macroeconomic consequences of alternative policy regimes in a closed economy where central bank, fiscal authority and monopoly union interact via their effects on output inflation. The analysis compares outcomes non-cooperative setting, players may move sequentially or simultaneously, regime cooperation between government wage-setters. cooperative captures climate accord among social parties that is finalised at common targets tradition corporatism, as recent experience “social pacts” many European countries. makes two main contributions. First, it shows are suboptimal deliver extreme (undesirable) results even when all share ideal for All would be better off with less value inflation, yet they fail to reach more advantageous allocation long there an inherent conflict further objectives. Moreover, result robust change degree bank’s conservatism. Second, I find towards taxes enhances welfare absence explicit coordination bank.