author = "Franzese Jr., Robert J."
title = "Monetary Policy and Wage/Price Bargaining: Macro-Institutional Interactions in the
Traded, Public, and Sheltered Sectors"
keywords = "monetary policy, central bank independence, corporatism, sectoral structure"
conference = "working97"

Prepared for Hall, Peter and David Soskice, eds., _Varieties of Capitalism: The Chalenges
Facing Contemporary Political Economies_ (forthcoming, title preliminary).

This chapter considers the politico-economic management of unemployment and inflation in
developed capitalist democracies, focusing on the institutional and structural features of labor
and goods markets and the credibility and conservatism of the monetary-policy authority. It
reviews the central-bank-independence (CBI) and coordinated-wage-/price-bargaining (CWB)
literatures and then offers a synthesis and extension which emphasizes that the degrees of CBI
and CWB interact, with each other and with the sectoral structure of the economy, to structure
the incentives facing the politico-economic actors involved in monetary policy and wage/price
bargaining. The empirical records of 21 OECD countries in the post-Bretton Woods era are then
used to evaluate the emergent hypotheses. The conclusion addresses two questions of pressing
intellectual and practical concern: the likely impact of and independent European central bank
and the roots of the "collapse" of CWB.

Zip File contains: Postscript version, WordPerfect 6/7/8 for Windows version, ASCII file of all
data necessary to replicate the results presented in the paper.

Correspondence: franzese@umich.edu, http://www-personal.umich.edu, (313) 936-1850