Credible disinflation and delayed slumps under real wage rigidity

Arbeitspapier

The paper studies the effects of credible disinflation in the presence of real wage rigidity, comparing the Calvo and Rotemberg price setting mechanisms (the two popular variants of the New-Keynesian model). In both types of models, a credible, gradual disinflation is shown to lead to a delayed slump in output along the transition path. The delayed-slump result is novel and owes to negative real wage growth along the transition path, whose effect is amplified by the degree of real wage rigidity.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Kiel Working Paper ; No. 1923

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Price Level; Inflation; Deflation ; Monetary Policy, Central Banking, and the Supply of Money and Credit: General
• Thema: sticky prices ; real wage rigidity ; disinflation ; nonlinear dynamics

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Tesfaselassie, Mewael
• Ereignis: Veröffentlichung
• (wer): Kiel Institute for the World Economy (IfW)
• (wo): Kiel
• (wann): 2014

Weitere Informationen

• Handle: http://hdl.handle.net/10419/97316
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ