Pissarides, Christopher 
ORCID: 0000-0002-0695-058X
(2003)
Unemployment in Britain: a European success story.
CEP discussion papers (CEPDP0600).
London School of Economics and Political Science. Centre for Economic Performance, London, UK.
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Abstract
Unemployment in Britain has fallen from high European-style levels to US levels. I argue that the key reasons are first the reform of monetary policy, in 1993 with the adoption of inflation targeting and in 1997 with the establishment of the independent Monetary Policy Committee, and second the decline of trade union power. I interpret the reform of monetary policy as an institutional change that reduced inflationary expectations in the face of falling unemployment. The decline of trade union power contributed to the control of wage inflation. The major continental economies failed to match UK performance because of institutional rigidities, despite low inflation expectations.
| Item Type: | Monograph (Discussion Paper) |
|---|---|
| Official URL: | http://cep.lse.ac.uk |
| Additional Information: | © 2003 The Author |
| Divisions: | Centre for Economic Performance Economics |
| Subjects: | H Social Sciences > HD Industries. Land use. Labor |
| JEL classification: | E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit J - Labor and Demographic Economics > J5 - Labor-Management Relations, Trade Unions, and Collective Bargaining J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J64 - Unemployment: Models, Duration, Incidence, and Job Search |
| Date Deposited: | 27 Apr 2007 |
| Last Modified: | 13 Sep 2024 19:49 |
| URI: | http://eprints.lse.ac.uk/id/eprint/2304 |
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