Working Paper Series, FIEF - Trade Union Institute for Economic Research
Anna Larsson and Johnny Zetterberg
Does Inflation Targeting Matter for Labour Markets? – Some Empirical Evidence
Abstract: This paper investigates the impact of inflation targeting
on wage formation and unemployment using a panel of 17 OECD countries
1972-2000. Five of the countries included in the study have combined
floating exchange rates with explicit inflation targets during the 1990s.
Using a theoretical framework for a small open economy, we present
simulation results and empirical tests of the model using two different
methods. There is some weak evidence that inflation targeting matters for
Keywords: Wage bargaining; Monetary regime; Equilibrium (un)employment; Inflation target; Exchange rate target; (follow links to similar papers)
JEL-Codes: E24; J50; (follow links to similar papers)
38 pages, September 17, 2003
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