Bonini, Patricia and Da Silva, Sergio (2007): Staggered wages, inflation, and discounting.
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Abstract
In the literature of staggered wages (Taylor, 1979, 1980; Blanchard, 1986; Ball and Cecchetti, 1991) the discount factor is neglected in the workers’ loss function. Yet discounting is to be viewed as an extra piece of micro-foundation with implications for discretionary monetary policy. We revisit the issue and show that discounting in the model of staggered wages actually lowers the time consistent steady inflation.
| Item Type: | MPRA Paper |
|---|---|
| Institution: | Federal University of Santa Catarina |
| Original Title: | Staggered wages, inflation, and discounting |
| Language: | English |
| Keywords: | Staggered wage model; Time consistent steady inflation; Discounting |
| Subjects: | E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E31 - Price Level ; Inflation ; Deflation E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E12 - Keynes ; Keynesian ; Post-Keynesian |
| Item ID: | 1979 |
| Depositing User: | Sergio Da Silva |
| Date Deposited: | 03 Mar 2007 |
| Last Modified: | 28 Sep 2019 04:59 |
| URI: | https://mpra.ub.uni-muenchen.de/id/eprint/1979 |
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