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IMF Staff papers: Volume 40 No. 2
Author:
International Monetary Fund. Research Dept.
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Series:
IMF Staff Papers
Volume/Issue:
Volume 1993: Issue 001
Language:
English
Publication Date:
01 Jan 1993
DOI:
https://doi.org/10.5089/9781451947137.024
ISBN:
9781451947137
ISSN:
1020-7635
Pages:
256
Keywords:
SP; priority mail delivery; wage indexation; exchange rate regime; IMF paper; debt indexation; Exchange rate arrangements; Wage indexation; Exchange rates; Inflation; Currency boards; Global; Baltics; Sub-Saharan Africa; Africa; Asia and Pacific; Eastern Europe; home authority
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The relationship between the degree of wage indexation chosen by private agents and the degree of public debt indexation chosen by the government is examined. It is shown that the government is likely to increase public debt indexation in response to an increase in wage indexation. By contrast, higher public debt indexation has an ambiguous effect on wage indexation. In equilibrium, wage and public debt indexation may be positively or negatively related. This relationship is analyzed in situations where the policymakers can precommit to policies and in those they cannot.
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Cover IMF Staff Papers
IMF Staff Papers
ISSN:
1020-7635
Publisher:
International Monetary Fund