Working Paper BETA #2007-27

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Title : Monetary accommodation and unemployment: Why central bank transparency matters.

Author(s) : Eleftherios Spyromitros, Blandine Zimmer

Abstract : Recent contributions have shown that in the presence of strategic interactions be- tween non atomistic unions and the central bank, an accommodating monetary policy rule may increase equilibrium unemployment. This note demonstrates that this result can be reversed considering the case where the central bank is not fully transparent concerning its reaction to wage decisions.

Key-words : Monetary regime; Wage setting; Central bank transparency.

JEL Classification : E24, E5, J51.