Ball, Laurence. <br/><br/>
Wage Indexation and Time-Consistent Monetary Policy / 
Laurence Ball, Stephen G. Cecchetti. 
 - Cambridge, Mass.  National Bureau of Economic Research  1989. 
 - 1 online resource:  illustrations (black and white); 
 - NBER working paper series  no. w2948 .
 - Working Paper Series (National Bureau of Economic Research)  no. w2948. .
<br/><br/> April 1989. 
<br/><br/> This paper investigates the effects of wage indexation on the time-consistent level of inflation. Departing from previous work on time-consistent policy, we study a structural model of the economy. Indexation reduces the cost of inflation, which is inflationary, and steepens the Phillips curve, which is anti-inflationary. In most cases, the net effect is to raise inflation but also to raise welfare: the loss from higher inflation is outweighed by the gain from greater protection against inflation. 
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