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Selected Works of Fred E. Foldvary
Article
The Dependency of Wage Contracts on Monetary Policy.
Journal of Institutional and Theoretical Economics (1995)
  • Fred E Foldvary, Virginia Polytechnic Institute and State University
  • George Selgin, University of Georgia
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Abstract
In response to the new-classical argument that anticipated monetary policy is ineffective, one New-Keynesian rebuttal posits sticky wages stemming from long-term labor contracts. We argue here that such fixed-wage contracts may reflect stabilization policy itself. Using an illustrative quantitative model, implemented by a computer program that computes the game payoffs, we analyze wage-contract strategies that could arise in response to various monetary policy strategies. (JEL: E 24, E 25).
Keywords
  • Monitoring costs,
  • Monetary policy,
  • Price levels,
  • Wage contracts,
  • Economic costs,
  • Variable costs,
  • Money supply,
  • Contracts,
  • Wages,
  • Nominal wages
Disciplines
Publication Date
December, 1995
Publisher Statement
SJSU users: use the following link to log in and access the article via SJSU databases.
Citation Information
Fred E Foldvary and George Selgin. "The Dependency of Wage Contracts on Monetary Policy." Journal of Institutional and Theoretical Economics Vol. 151 Iss. 4 (1995) p. 658 - 676 ISSN: 0932-4569
Available at: http://works.bepress.com/fred_foldvary/33/