TY  - JOUR
AU  - Velasco,Andres
AU  - Guzzo,Vincenzo
TI  - The Case for a Populist Banker
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6802
PY  - 1998
Y2  - November 1998
UR  - http://www.nber.org/papers/w6802
L1  - http://www.nber.org/papers/w6802.pdf
N1  - Author contact info:
Andres Velasco
Marne 2962
Las Condes.
Santiago
CHILE
Tel: 56983616001
E-Mail: avbranes@gmail.com
AB  - We present a general equilibrium optimizing model in which we study the joint effects of centralization of wage setting and central bank conservatism on economic performance.  Several striking conclusions emerge.  In relatively centralized labor markets employment and output are decreasing and inflation is initially increasing and then decreasing in the degree of central bank conservatism.  A radical-populist central banker who cares not at all about inflation (alternatively, who is not conservative) maximizes social welfare.  Economic performance is not U-shaped in the degree of centralization of the labor market, in contrast to conventional wisdom.
ER  -