549,981 research outputs found

    Australian Wage Policy: Infancy and Adolescence

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    The advent of industrial regulation by tribunal came close to the turn of the century. Wages boards began in Victoria in 1896 and courts of arbitration in 1900. The first day of the new century was also the first day of the Commonwealth of Australia, endowed with a Parliament that was empowered to institute its chosen models of conciliation and arbitration for the prevention and settlement of interstate industrial disputes. This book is a study of the operation of conciliation and arbitration, especially by the Commonwealth Court of Conciliation and Arbitration, from the inception of the system until World War II. It is not, however, a general history of conciliation and arbitration. It does not, for example, deal with the successes and failures of the tribunals in preventing strikes and lockouts; or with the manifold legal issues to which the system gave rise, unless they affected significantly the tribunals’ exercise of their power to fix wages and conditions. Rather, it is about fixing the terms of employment; and it attempts to set the tribunals’ performance in an economic context. It is about ‘wage policy’, if the term is interpreted broadly enough to include both prescribed wages and other factors that affect the cost of labour, including working hours and leave

    Australian Wage Policy: Infancy and Adolescence

    Get PDF
    The advent of industrial regulation by tribunal came close to the turn of the century. Wages boards began in Victoria in 1896 and courts of arbitration in 1900. The first day of the new century was also the first day of the Commonwealth of Australia, endowed with a Parliament that was empowered to institute its chosen models of conciliation and arbitration for the prevention and settlement of interstate industrial disputes. This book is a study of the operation of conciliation and arbitration, especially by the Commonwealth Court of Conciliation and Arbitration, from the inception of the system until World War II. It is not, however, a general history of conciliation and arbitration. It does not, for example, deal with the successes and failures of the tribunals in preventing strikes and lockouts; or with the manifold legal issues to which the system gave rise, unless they affected significantly the tribunals’ exercise of their power to fix wages and conditions. Rather, it is about fixing the terms of employment; and it attempts to set the tribunals’ performance in an economic context. It is about ‘wage policy’, if the term is interpreted broadly enough to include both prescribed wages and other factors that affect the cost of labour, including working hours and leave

    Wage Flexibility or Wage Coordination? Economic Policy Implications of the Wage-Led Demand Regime in the Euro Area

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    Wage shares have fallen substantially in Europe since the early 1980s. To some extent this is due to a macroeconomic policy package that encourages wage flexibility and wage competition. A system of wage coordination in the Euro area would facility a return to a productivity-oriented wage policy by reducing wage competition. In a recent study on the demand effects of changes in functional income distribution Stockhammer, Onaran und Ederer (2007) find that the Euro area is in a wage-led demand regime. According to their results a reduction of the wage share by 1%-point leads to a reduction of demand by around 0.2%-points of GDP. This finding has far reaching implications for economic policy. A stable wage share would help stabilize demand. The paper aims, first, at clarifying some conceptual issues in the design of a European system of productivity-oriented wage coordination and, second, it discusses the economic policy implications of wage coordination. The present policy package assigns wages the role of a shock absorber. However, as wage reductions do have negative demand effects in a wage-led demand regime, this policy has a deflationary bias. A system of wage coordination will thus have to be complemented by a more active nation fiscal policies and more fiscal redistribution within the EU. If so a regime of productivity oriented wage coordination will help to stabilize demand and it is consistent with price stability. ïżœmacroeconomics, economic policy, policy mix, wage coordination, European Union

    International monetary policy cooperation revisited: conservatism and non-atomistic wage setting

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    This paper presents a simple model of policy coordination in line with the New Open Economy Macroeconomics literature. I extent the analysis on non-cooperative toward cooperative solutions by incorporating a collective wage bargaining system and conservative central banks. It turns out that previous results on international monetary policy cooperation are modified such that cooperation is welfare improving. The finding in the model relies on wage setters’ perceptions about affecting monetary policy. It is shown that under cooperation wage setters perceive a tighter monetary policy, thereby inducing wage restraints.Monetary policy games , International policy coordination , Central bank conservatism, Monopoly unions

    Unions, wage setting and monetary policy uncertainty

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    Recent theoretical research has studied extensively the link between wage setting and monetary policymaking in unionized economies. This paper addresses the question of the role of monetary uncertainty from both an empirical and theoretical point of view. Our analysis is based on a simple model that derives the influence of monetary uncertainty on unionized wage setting. We construct an indicator of monetary policy uncertainty and test our model with data for the G5 countries. The central finding is that monetary policy uncertainty has a negative impact on nominal wage growth in countries where wage setting is relatively centralized. This result is consistent with recent theoretical approaches to central bank transparency and wage setting. JEL Classification: E58centralized wage setting, Monetary policy uncertainty, union behavior

    Australian wage policy: infancy and adolescence

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    The advent of industrial regulation by tribunal came close to the turn of the century. Wages boards began in Victoria in 1896 and courts of arbitration in 1900. The first day of the new century was also the first day of the Commonwealth of Australia, endowed with a Parliament that was empowered to institute its chosen models of conciliation and arbitration for the prevention and settlement of interstate industrial disputes. This book is a study of the operation of conciliation and arbitration, especially by the Commonwealth Court of Conciliation and Arbitration, from the inception of the system until World War II. It is not, however, a general history of conciliation and arbitration. It does not, for example, deal with the successes and failures of the tribunals in preventing strikes and lockouts; or with the manifold legal issues to which the system gave rise, unless they affected significantly the tribunals’ exercise of their power to fix wages and conditions. Rather, it is about fixing the terms of employment; and it attempts to set the tribunals’ performance in an economic context. It is about ‘wage policy’, if the term is interpreted broadly enough to include both prescribed wages and other factors that affect the cost of labour, including working hours and leave.Keith Hancockhttp://www.adelaide.edu.au/press/titles/wage-policy

    Policy rule evaluation by contract-makers: 100 years of wage contract length in Sweden

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    The length of collective wage agreements in Sweden between 1908 and 2005 is explored to evaluate a variety of policy regimes from the wage contract-makers' perspective. Adopting a new long-run test, it is found that wage contract length decreases in response to an increase in ñ€macroeconomic uncertaintyñ€ across policy regimes. There is also substantial short-run variation in contract length, which cautions against regime divisions based solely on the policy rule. The inflation targeting regime 1995-2005 stands out as an exceptionally stable policy regime as judged by the willingness of contract-makers to repeatedly commit to three-year non-indexed wage agreements. The results are based on a data base on collective wage agreements unique in international comparisons in terms of length and coverage.Policy regime, contract length, wage indexation, Lucas critique, Sweden, credibility, inflation targeting, Fregert, Jonung

    Higher economic growth through macroeconomic policy coordination? The combination of wage policy and monetary policy

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    Strengthening potential output is high on the agenda for economic policy in the European Union. While there is widespread agreement that structural policies have a positive impact on long-term growth, there is a controversial discussion whether coordination of macroeconomic policies can contribute to this goal. Against the background of the new economic conditions in the euro area, we analyze what could be gained from a combination of wage policy and monetary policy. Using a small theoretical macroeconomic model, we show that coordination between wage policy and monetary policy can be beneficial under certain assumptions. A policy of sustained wage moderation results in an increase in employment and potential output. Assuming that expectations are not completely forward-looking and prices are sticky, the upward shift in potential output will not be matched by a similar increase in aggregate demand. To prevent an output gap from emerging, the optimal monetary policy is to lower interest rates. However, a central bank aiming at price stability will only do so when the announcement of a policy of sustained wage moderation is credible. Simulations with a large macroeconometric multicountry model confirm that a coordination of German wage policy and ECB monetary policy would help to realize the beneficial effects of wage moderation somewhat faster, although the quantitative effect is relatively small. The long-run gain in employment would accrue regardless of a coordination with monetary policy. According to the simulations, employment in Germany would increase by about 750,000 persons in the long run if wages increase one percentage point slower than usual over a period of five years. Frequently, countries with a particularly positive economic development are said to have benefited from a coordination of macroeconomic policies. However, only a small part of the growth and employment success in these countries can be accounted for such a coordination. In the case of the United States, it is hard to see any evidence of ex ante policy coordination at all. In the Netherlands and in Ireland, a consensual strategy of wage restraint for improving the competitiveness of the economy and stimulating employment has been a significant factor of the economic success. It was important in both cases that significant supply side reforms were implemented by the governments at the same time, whereas monetary policy played no active role. Coordination of macro policies is severely complicated by the pronounced differences in national wage bargaining systems. The systems would have to be harmonized and centralized to create a single European wage policy. It is, however, unlikely that centrally designed harmonization of labor market institutions in the EU can cope with the differences across Euroland regarding productivity and employment. In the framework of the European Union, the presumed positive effects of policy coordination are stressed over and over again, for example in the Broad Economic Policy Guidelines. However, clear definitions and mechanisms how such a coordination can be achieved are missing. The fundamental difficulty concerning a coordination between wage policy and monetary policy arises from two facts: First, there is no such thing as “the” wage policy at the European level. Second, the statute of the ECB does not allow a binding commitment by the central bank. This does not mean, however, that the ECB would not take account of what is happening, for example, to wage developments. According to the monetary policy strategy, it should react if there is an increase in the growth rate of potential output as a result of wage moderation. For example: If the social partners in a large country such as Germany give a credible signal that wage increases will be moderate for several years, the ECB could accommodate this change. However, such a strategy cannot be reversed in that the ECB moves first hoping that wage moderation will follow. --

    The Inflationary Impact of Wage Indexation

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    It is an open question whether and how indexed wage contracts reduce welfare or raise average inflation. This paper analyzes the impact of indexed wage contracts on inflation and social welfare in a Barro–Gordon model with discretionary monetary policy by endogenizing social costs of indexation. Main results are: Wage indexation reduces the inflation bias but may raise the variance of inflation rates. In social optimum wages are fully indexed to the price level, but this requires optimal wage adjustments to productivity shocks. If wage adjustments to productivity are suboptimal, the second best solution calls for non–indexed wage contracts and a central banker with balanced aspiration levels of employment and real wages. In case of decentralized wage bargaining, a prohibition of wage indexation may improve welfare.monetary policy, Phillips curve, wage bargaining, wage indexation
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