Are The Income Policy Agreements Of 1992-93 In Italy Still Valid?Towards A Theory For The Optimal Design Of The “Social Pact”In The European Monetary Union

  • Lilia Cavallari

This chapter analyses the macroeconomic consequences of a “social pact” among the government, trade unions and employers’ associations aimed at keeping the growth in domestic wages and prices in line with the government’s inflation target in a country belonging to a monetary union. We demonstrate that an outward-looking social pact which targets union-wide inflation can lead employment at the competitive level and eliminating the inflationary (or deflationary) bias in the economy.

Key words: Employment, inflation, social pacts, EMU.


Monetary Policy Central Bank Trade Union Real Wage Monetary Union 
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Copyright information

© Springer Science+Business Media, LLC 2008

Authors and Affiliations

  • Lilia Cavallari
    • 1
  1. 1.Department of Political Institutions, Economics and SocietyUniversità Roma TreItaly

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