The Interaction of Monetary Policy and Wage Bargaining in the European Monetary Union: Lessons from the Endogenous Money Approach

by Sebastian Dullien

Sebastian Dullien gives a novel explanation for unemployment and inflation in the Euro-Zone. He argues that unemployment stems from a lack of co-operation between unions and monetary In an economy with endogenous money as EMU, wage setters are responsible for price stability while the central bank is responsible for the level of output. Co-operation between both actors is necessary for high employment and low inflation. The current institutional set-up is found to be unable to assure cooperation.

290 pages, Hardcover

First published January 1, 2004