Vogel, Lukas (2008): Interacting nominal and real labour market rigidities.
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Abstract
This note analyses the interaction between nominal wage stickiness and costly employment adjustment in a small closed-economy New Keynesian model with simple rule-based or optimal monetary policy. The results show (1) the costs of nominal and real rigidity to depend on the policy regime, (2) optimal policy to substantially contain the welfare loss, and (3) the absence of quantitatively important secondbest interaction, suggesting that reducing rigidity along one dimension alone does not risk reducing overall welfare.
Item Type: | MPRA Paper |
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Original Title: | Interacting nominal and real labour market rigidities |
Language: | English |
Keywords: | Wage stickiness; employment adjustment costs; second best |
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: | 24513 |
Depositing User: | Lukas Vogel |
Date Deposited: | 22 Aug 2010 00:39 |
Last Modified: | 05 Oct 2019 16:44 |
References: | Ascari, G., Merkl, Ch., 2009. Real Wage Rigidities and the Cost of Disinflations. J. Money, Credit, Banking 41, 417-435. Blanchard, O., Galí, J., 2007. Real Wage Rigidities and the New Keynesian Model. J. Money, Credit, Banking 39, 35-65. Canzoneri, M., Cumby, R., Diba, B., 2007. The Cost of Nominal Rigidity in NNS Models. J. Money, Credit, Banking 39, 1563-1586. Duval, R.. Vogel, L., 2007. How Do Nominal and Real Rigidities Interact? A Tale of the Second Best. MPRA Papers 7282. Hall, R., 2004. Measuring Factor Adjustment Costs. Quart. J. Econ. 119, 899-927. Lechthaler, W., Snower, D., 2008. Quadratic Labor Adjustment Costs and the New-Keynesian Model. Kiel Working Papers 1453. Levin, A., Onatski, A., Williams, J., Williams, N., 2005. Monetary Policy Under Uncertainty in Micro-Founded Macroeconometric Models. NBER Working Papers 11523. Ratto, M., Roeger, W., In't Veld, J., 2010. Using a DSGE Model to Look at the Recent Boom-Bust Cycle in the US. European Economy Economic Papers 397. Sahuc, J.-G., Smets, F., 2008. Differences in Interest Rate Policy at the ECB and the Fed: An Investigation with a Medium-Scale DSGE Model. J. Money, Credit, Banking 40, 505-521. Smets, F., Wouters, R., 2005. Comparing Shocks and Frictions in US and Euro Area Business Cycles: A Bayesian DSGE Approach. J. Appl. Econometrics 20, 161-183. Smets, F., Wouters, R., 2007. Shocks and Frictions in US Business Cycles: A Bayesian DSGE Approach. Amer. Econ. Rev. 97, 586-606. |
URI: | https://mpra.ub.uni-muenchen.de/id/eprint/24513 |
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Interacting nominal and real labour market rigidities. (deposited 28 Nov 2008 01:13)
- Interacting nominal and real labour market rigidities. (deposited 22 Aug 2010 00:39) [Currently Displayed]