The chapter first introduces Tarantelli’s thought on the role of labour economics and social pacts. The implementation of his proposals for a social pact in Italy is then discussed and compared to similar experiences in Europe. Attention is finally devoted to developing a theory of social...

The chapter investigates the effects of the wage determination mechanism based on bargaining and efficiency wages introduced in Italy in 1993. The analysis deals specifically with the productivity effects of the efficiency wage approach and tests the role of different profit sharing schemes...

The chapter presents a model, where the union is interested in the level of wages, employment and the level of public expenditure. Social pacts are shown not only to lead to a superior macroeconomic performance, but to be also acceptable by unions. The key to their acceptability lies in the...

The chapter introduces some biographical notes of Ezio Tarantelli and relates the formation of his ideas to the influence of his intellectual formation at the two Cambridges (Cambridge, England, and Cambridge, Mass); the end of the Sixties student uprisings, the bitter strikes of Italy’s hot...

The chapter presents a model somehow inspired to Tarantelli. It first shows how important the value of the parameters reflecting nominal rigidities and industrial relations can be for the dynamics of the system. The indexation system has a certain influence on the former, in line with...

The chapter documents the rising trend in wage inequality in Europe and trace it back to a number of factors. Industrial relations have an influence on the degree of wage dispersion, thus being a determinant of macroeconomic performance. Social pacts do not necessarily have a negative influence...

The chapter reconstructs Tarantelli’s suggestions for putting the inflation of the ’70s to an end in Italy. He proposed to pre-determine wage increases in order to guide prices along a path agreed by social partners and also advocated using incomes policy as an instrument of coordination for...

The chapter restates Tarantelli’s approach to macroeconomic stabilisation and the role of wage bargaining institutions. It also discusses the patterns and variation in the institutional make-up of wage bargaining since 1980, documenting the evolution of the social pacts stipulated in Europe...