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

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 â€macroeconomic uncertainty†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

Heckscher on the Slow Monetization of Sweden and His Incidental Refutation of Jevons and Menger

Eli F. Heckscher found that in 16'th century Sweden: 1) indirect barter was the most common exchange method and 2) monetary exchange was carried out with different coins, none a generally accepted medium of exchange. These findings refute models of the emergence of money, which builds on Jevons and Menger. Heckscher and later Wesley C. Mitchell thought the historical evolution of the exchange system would be a central theme and organizing principle for economic history, which has not happened. I discuss how the ideas of Heckscher may be combined with modern monetary theory to explain gradual monetization

Wage contracts, policy regimes, and business cycles. A contractual history of Sweden 1908-1990.

The monograph explores: 1) the determinants of length, degree of indexation, degree of synchronization and coverage of collective agreements across monetary regimes in Sweden 1908 to 1990, 2) the effect of these determinants on the business cycles as described by length and correlations of macroeconomic variables. The first part synthesizes and extends the teory of endogenous wage contracts. The study comfirms the theory of endogenous wage contracting, first presented by Jo Anna Gray in 1976, and by implication the importance of the Lucas critique of standard macroeconomic modelling