Shaken or Stirred? Financial Deregulation and the Monetary Transmission Mechanism in Norway

Article Abstract:

Is there a credit channel for monetary policy? Has the deregulation of financial markets had any temporary or permanent effects on the monetary transmission mechanism? We present empirical evidence on these issues for Norway by estimating a dynamic system of money, credit, real income and inflation. We find that the deregulation process has not caused any permanent shifts in the long-run demand functions. Within a small simultaneous dynamic model, there is some evidence for the credit view of the monetary transmission mechanism, as both credit and money exhibit strong and stable effects on aggregate demand. Keywords: Macroeconomics; monetary policy; credit view; dynamic econometrics; equilibrium correction; cointegration JEL classification: E50; E44; C51

Norway

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Insider Bargaining Power, Starting Wages and Involuntary Unemployment

Article Abstract:

Recent studies of wage bargaining and unemployment have emphasized the distinction between insiders and outsiders, and that unions act in the interest of insiders. Yet it is typically assumed that insiders and recently hired outsiders are paid the same wage. We consider a model where the starting wage may differ from the insider wage, but incentive constraints associated with turnover affect the form of the contract. We examine under what conditions the starting wage is linked to the insider wage so that increased bargaining power of insiders raises the starting wage and reduces the hiring of outsiders. Keywords: Starting wage; bargain; seniority; hiring; severance payment JEL classification: J23; J31; J33

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