Vogel, Lukas (2008): Interacting nominal and real labour market rigidities.
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Abstract
Abstract: This note investigates the interaction between nominal and real labour market rigidities. It shows nominal wage rigidity to have little effect on the welfare loss from labour adjustment costs under a labour supply shock. This implies that the second best effect of nominal price stickiness under real wage persistence studied in Duval and Vogel (2007) does not apply to the propagation of supply shocks under nominal wage rigidity and labour adjustment costs.
Item Type: | MPRA Paper |
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Original Title: | Interacting nominal and real labour market rigidities |
Language: | English |
Keywords: | Labour adjustment costs; wage stickiness; rigidity interaction |
Subjects: | E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations ; Cycles E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E24 - Employment ; Unemployment ; Wages ; Intergenerational Income Distribution ; Aggregate Human Capital ; Aggregate Labor Productivity J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J23 - Labor Demand J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J30 - General |
Item ID: | 11798 |
Depositing User: | Lukas Vogel |
Date Deposited: | 28 Nov 2008 01:13 |
Last Modified: | 01 Oct 2019 07:51 |
References: | Ascari, G. and Ch. Merkl, 2007, Real Wage Rigidities and the Cost of Disinflations, IZA Discussion Papers 3049. Blanchard, O. and J. Galí, 2007, Real Wage Rigidities and the New Keynesian Model, Journal of Money, Credit, and Banking 39, 35-65. Canzoneri, M., R. Cumby and B. Diba, 2004, The Cost of Nominal Inertia in NNS Models, NBER Working Papers 10889. Duval, R. and L. Vogel, 2007, How Do Nominal and Real Rigidities Interact? A Tale of the Second Best, MPRA Papers 7282. Galí, J., 2008, Monetary Policy, Inflation and the Business Cycle. (Princeton University Press, Princeton). Hall, R., 2004, Measuring Factor Adjustment Costs, Quarterly Journal of Economics 119, 899-927. Lechthaler, W. and D. Snower, 2008, Quadratic Labor Adjustment Costs and the New-Keynesian Model, Kiel Working Papers 1453. Sahuc, J.-G. and F. Smets, 2008, Differences in Interest Rate Policy at the ECB and the Fed: An Investigation with a Medium-Scale DSGE Model, Journal of Money, Credit and Banking 40, 505-521. Smets, F. and R. Wouters, 2005, Comparing Shocks and Frictions in US and Euro Area Business Cycles: A Bayesian DSGE Approach, Journal of Applied Econometrics 20, 161-183. |
URI: | https://mpra.ub.uni-muenchen.de/id/eprint/11798 |
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