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A game-theoretical interpretation of inflation and unemployment in Western Europe
Focusing on 4 countries, Austria, Great Britain, Sweden and West Germany, it is shown that both runaway inflation and rising unemployment could be avoided whenever it was possible to achieve a Keynesian concertation between fiscal and monetary expansion on the one hand and union wage restraint on th...
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Published in: | Journal of public policy 1987-07, Vol.7 (Jul-Sep 87), p.227-257 |
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Main Author: | |
Format: | Article |
Language: | English |
Subjects: | |
Online Access: | Get full text |
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Summary: | Focusing on 4 countries, Austria, Great Britain, Sweden and West Germany, it is shown that both runaway inflation and rising unemployment could be avoided whenever it was possible to achieve a Keynesian concertation between fiscal and monetary expansion on the one hand and union wage restraint on the other. The actual policy experiences of the 4 countries are then explained in terms of the linkage between a 'coordination game' played between the government and the unions in which macro-economic outcomes are determined, and a politics game in which the government tries to anticipate the electoral responses of different voter strata to these outcomes. (Abstract amended) |
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ISSN: | 0143-814X |