@techreport{NBERw2948,
 title = "Wage Indexation and Time-Consistent Monetary Policy",
 author = "Laurence Ball and Stephen G. Cecchetti",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "2948",
 year = "1989",
 month = "April",
 URL = "http://www.nber.org/papers/w2948",
 abstract = {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.},
}