Arbeitspapier
Real wage rigidities and the cost of disinflations
This paper analyzes the cost of disinflations under real wage rigidities in a micro-founded New Keynesian model. The consensus is that real wage rigidities can be a useful mechanism to induce the inflation persistence that is absent in the standard Calvo model. Real wage rigidities thus generate a slump in output after a credible disinflationary policy. This consensus is flawed, since it depends on analyzing the model in a linearized framework. Once nonlinearities are taken into account, the results change dramatically, both qualitatively and quantitatively. Real wage rigidities imply neither inflation persistence, nor output costs of disinflations. Real wage rigidities actually create a boom after a permanent reduction in the inflation target of the monetary policy. -- Disinflation ; sticky prices ; real wage rigidities ; nonlinearities
- Sprache
-
Englisch
- Erschienen in
-
Series: IZA Discussion Papers ; No. 3049
Lohnrigidität
Arbeitslosigkeit
Geldpolitisches Ziel
Ungleichgewichtstheorie
New-Keynesian Phillips Curve
Merkl, Christian
- Handle
- Letzte Aktualisierung
-
12.07.2024, 13:23 MESZ
Objekttyp
- Arbeitspapier
Beteiligte
- Ascari, Guido
- Merkl, Christian
- Institute for the Study of Labor (IZA)
Entstanden
- 2007
Ähnliche Objekte (12)
Real wage rigidities and the cost of disinflations: A comment on Blanchard and Galí
Real wage rigidities and the cost of disinflations: A comment on Blanchard and Galí
The inflation-output tradeoff: which type of labor market rigidity is to be blamed?
The elusive welfare economics of price stability as a monetary policy objective: why New Keynesian central bankers should validate core inflation
A New Keynesian Model with Unemployment
A new Keynesian model with unemployment
A New Keynesian model with unemployment
Monetary and labor policies under market frictions
Disinflationary booms?
Real wage rigidities and the new Keynesian model
Real Wage Rigidities and Disinflation Dynamics: Calvo vs. Rotemberg Pricing
Output and inflation in models of the business cycle with nominal rigidities: Some counterfactual evidence
Real wage rigidities and the cost of disinflations: A comment on Blanchard and Galí
Real wage rigidities and the cost of disinflations: A comment on Blanchard and Galí
The inflation-output tradeoff: which type of labor market rigidity is to be blamed?
The elusive welfare economics of price stability as a monetary policy objective: why New Keynesian central bankers should validate core inflation
A New Keynesian Model with Unemployment
A new Keynesian model with unemployment
A New Keynesian model with unemployment
Monetary and labor policies under market frictions
Disinflationary booms?
Real wage rigidities and the new Keynesian model
Real Wage Rigidities and Disinflation Dynamics: Calvo vs. Rotemberg Pricing
Output and inflation in models of the business cycle with nominal rigidities: Some counterfactual evidence
Real wage rigidities and the cost of disinflations: A comment on Blanchard and Galí
Real wage rigidities and the cost of disinflations: A comment on Blanchard and Galí
The inflation-output tradeoff: which type of labor market rigidity is to be blamed?
The elusive welfare economics of price stability as a monetary policy objective: why New Keynesian central bankers should validate core inflation
A New Keynesian Model with Unemployment
A new Keynesian model with unemployment
A New Keynesian model with unemployment
Monetary and labor policies under market frictions
Disinflationary booms?
Real wage rigidities and the new Keynesian model
Real Wage Rigidities and Disinflation Dynamics: Calvo vs. Rotemberg Pricing