TY - BOOK ID - 84541560 TI - Optimal Central Bank Conservatism and Monopoly Trade Unions AU - Hefeker, Carsten. AU - Berger, Helge. AU - Schlöb, Ronnie. PY - 2002 SN - 1462315739 1452781567 1281602523 1451893574 9786613783219 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Banks and Banking KW - Inflation KW - Investments: Options KW - Labor KW - Monetary Policy, Central Banking, and the Supply of Money and Credit: General KW - Central Banks and Their Policies KW - Labor-Management Relations, Trade Unions, and Collective Bargaining: General KW - Trade Unions: Objectives, Structure, and Effects KW - Pension Funds KW - Non-bank Financial Institutions KW - Financial Instruments KW - Institutional Investors KW - Banks KW - Depository Institutions KW - Micro Finance Institutions KW - Mortgages KW - Price Level KW - Deflation KW - Wages, Compensation, and Labor Costs: General KW - Trade unions KW - Finance KW - Banking KW - Macroeconomics KW - Labour KW - income economics KW - Labor unions KW - Options KW - Real wages KW - Derivative securities KW - Banks and banking KW - Prices KW - Wages UR - https://www.unicat.be/uniCat?func=search&query=sysid:84541560 AB - The "conservative central banker" has come under attack recently. On the basis of models in which there is explicit interaction between trade union behavior and monetary policy, it has been argued that if 'trade unions' are averse to inflation, welfare will be lower with a conservative than with a liberal central bank. We reframe this discussion in a standard trade union model. We show that the case against the conservative central banker rests exclusively on the assumption of a strictly nominal outside option (for instance, unemployment benefits) for the union. There is no welfare gain associated with making the central bank less conservative than society, however, if the outside option is in real terms. As the nominal components of the trade union's outside option are mainly public transfers, we also show that the conservative central banker is always optimal if the government can choose the level of nominal unemployment benefits as well as the degree of central bank conservatism. ER -