Research Discussion Paper – RDP 8909 Optimal Wage Indexation, Monetary Policy and the Exchange Rate Regime

Contents

• Introduction
• The Model
• The Optimal Degree of Wage Indexation
• Estimation
• Results
• Summary and Conclusions
• References
• Appendix 1: Data Definitions and Sources
• Appendix 2: Testing the Overidentifying Restrictions
• Appendix 3: Calculating the Variance of Θ

I am grateful for helpful suggestions from Larry Ball, Ben Bernanke, Alan Blinder, Bill Branson, seminar participants at Princeton and colleagues at the RBA. Any errors are mine alone. The views expressed herein are those of the author and do not necessarily reflect the views of the Reserve Bank of Australia.