Strategic monetary policy in a monetary union with non-atomistic wage setters

∕3f→0

NMP

NMP

Figure 2: Employment and CBC when adverse competition effect prevails under a NMP
.—.

regime but not in a MU. For values of β < β the common CB is populist, while for values
.—.

of β > β is conservative.

Figure 3: Employment and CBC when adverse output effect prevails in both regimes. For
.—.                                                                                                                                    -—.

values of β < β the common CB is populist, while for values of β > β is conservative.

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