Table of Contents - 8 Figures and Tables - 10 Preface - 12 1 The Political Economy of Adjustment in Europe - 16 The limits of neo-corporatist analysis - 23 The approach of this book - 27 Methodological issues - 33 Conclusion - 36 2 Governments and Wages – A Theoretical Framework - 38 Policies on wages - 39 Monetary and wage bargaining regimes in the political economy literature - 47 Explaining policy choices - 58 Conclusion - 61 3 Policy Options and Institutions: How Governments Respond - 62 Policy options towards the redistributional power of trade unions: market responses and negotiations - 63 The operationalization of variables - 72 The relationship between institutional and political accommodation - 82 Conclusion - 88 4 Striving for Conservatism: The Shift in Monetary Regimes - 92 Credibility and the inflation bias - 93 European monetary integration as a tool for achieving central bank conservatism - 96 Central bank independence, monetary policy and government intervention - 111 Government intervention to foster monetary conservatism - 119 5 The Politics of Government Intervention - 122 Institutional constraints on governments - 124 The shared roots of consensus democracy and corporatist responses: the political fragmentation of trade unions and the role of union-party relations - 133 The role of partisanship - 144 Conclusion: Negotiated adjustment and the role of political institutions - 150 6 The Responsiveness of Wage Bargaining Institutions - 152 Theoretical assumptions about wage flexibility and the role of wage bargaining institutions - 154 Priorities of trade unions between employment and real wage protection in wage bargaining - an empirical measure - 158 The institutional basis of wage responsiveness - 165 Conclusion: Shifting workers’ wage expectations - 182 7 The Interaction between Wage Bargaining Institutions and Government Intervention - 188 The responsive wage bargaining regimes: Germany and Austria - 189 The non-responsive corporatist countries - 197 Adjustment of wage expectations in the non-corporatist countries with non-responsive wage bargaining regimes - 212 Conclusion: A comparative view on the dynamic between wage bargaining institutions and government intervention - 230 8 Negotiated Adjustment – A European Approach - 234 Policy options towards trade unions’ redistributional power - 236 The interaction of institutions and policies - 242 The nature of negotiated adjustment: Reinforcing mechanisms of trade union incorporation - 245 The German role model - 247 The United Kingdom as the European exception - 250 Outlook: Implications for adjustment under EMU - 252 Appendices - 256 Appendix to chapter 3 - 256 Appendix to chapter 5 - 258 Appendix to chapter 6 - 261 Notes - 274 Bibliography - 290 Index of Names - 318 Index of Subjects - 324