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Author : Günter Coenen
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (17 download)
Download or read book Downward Nominal Wage Rigidity and the Long-run Phillips Curve written by Günter Coenen and published by . This book was released on 2003 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Pierpaolo Benigno
Publisher : International Monetary Fund
ISBN 13 : 1451871813
Total Pages : 48 pages
Book Rating : 4.4/5 (518 download)
Download or read book The Inflation-Unemployment Trade-off at Low Inflation written by Pierpaolo Benigno and published by International Monetary Fund. This book was released on 2009-03-01 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: Wage setters take into account the future consequences of their current wage choices in the presence of downward nominal wage rigidities. Several interesting implications arise. First, a closed-form solution for a long-run Phillips curve relates average unemployment to average wage inflation; the curve is virtually vertical for high inflation rates but becomes flatter as inflation declines. Second, macroeconomic volatility shifts the Phillips curve outward, implying that stabilization policies can play an important role in shaping the trade-off. Third, nominal wages tend to be endogenously rigid also upward, at low inflation. Fourth, when inflation decreases, volatility of unemployment increases whereas the volatility of inflation decreases: this implies a long-run trade-off also between the volatility of unemployment and that of wage inflation.
Author : Günter Coenen
Publisher :
ISBN 13 :
Total Pages : 20 pages
Book Rating : 4.:/5 (765 download)
Download or read book Downward Nominal Wage Rigidity and the Long-run Phillips Curve written by Günter Coenen and published by . This book was released on 2003 with total page 20 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Stefan Reitz
Publisher :
ISBN 13 :
Total Pages : 21 pages
Book Rating : 4.:/5 (81 download)
Download or read book Fixing the Phillips Curve written by Stefan Reitz and published by . This book was released on 2012 with total page 21 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Steinar Holden
Publisher :
ISBN 13 :
Total Pages : 60 pages
Book Rating : 4.3/5 ( download)
Download or read book The Costs of Price Stability - Downward Nominal Wage Rigidity in Europe written by Steinar Holden and published by . This book was released on 2002 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt: In most European countries, the prevailing terms of employment, including the nominal wage, can only be changed by mutual consent. I show that this feature implies that workers have a strategic advantage in the wage negotiations when they try to prevent a cut in nominal wages. If inflation is so low that some nominal wages have to be cut, the strategic advantage of the workers' induces higher unemployment in equilibrium. The upshot is a long run tradeoff between inflation and unemployment for low levels of inflation. The prediction that low inflation involves higher unemployment in Europe but not in the US, is consistent with previous empirical findings.
Author : Mirko Abbritti
Publisher : International Monetary Fund
ISBN 13 : 1513583980
Total Pages : 49 pages
Book Rating : 4.5/5 (135 download)
Download or read book Endogenous Growth, Downward Wage Rigidities and Optimal Inflation written by Mirko Abbritti and published by International Monetary Fund. This book was released on 2021-08-06 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt: Standard New Keynesian (NK) models feature an optimal inflation target well below two percent, limited welfare losses from business cycle fluctuations and long-term monetary neutrality. We develop a NK framework with labour market frictions, endogenous productivity and downward wage rigidity (DWR) which challenges these results. The model features a non-vertical long-run Phillips curve between inflation and unemployment and a trade-off between price distortions and output hysteresis that change the welfare-maximizing inflation level. For a plausible set of parameters, the optimal inflation target is in excess of two percent, a target value commonly used across central banks. Deviations from the optimal target carry welfare costs multiple times higher than in traditional NK models. The main reason is that endogenous growth and DWR generate asymmetric and hysteresis effects on unemployment and output. Price level targeting or a Taylor-rule responding to the unemployment rate can handle better the asymmetric and hysteresis effects in our model and deliver significant welfare gains. Our results are robust to the inclusion of the effective lower bound on the monetary policy interest rate.
Author : David E. Lebow
Publisher :
ISBN 13 :
Total Pages : 50 pages
Book Rating : 4.E/5 ( download)
Download or read book Downward Nominal Wage Rigidity written by David E. Lebow and published by . This book was released on 1999 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Michael W. L. Elsby
Publisher :
ISBN 13 :
Total Pages : 72 pages
Book Rating : 4.3/5 ( download)
Download or read book Evaluating the Economic Significance of Downward Nominal Wage Rigidity written by Michael W. L. Elsby and published by . This book was released on 2006 with total page 72 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper formalizes and assesses empirically the implications of widely observed evidence for downward nominal wage rigidity (DNWR). It shows how a model of DNWR informed by diverse evidence for worker resistance to nominal wage cuts is nevertheless consistent with weak macroeconomic effects. This occurs because firms have an incentive to compress wage increases as well as wage cuts when DNWR binds. By neglecting potential compression of wage increases, the previous literature may have overstated the costs of DNWR to firms. Using a broad range of micro--data from the US and Great Britain I find that firms do indeed compress wage increases as well as wage cuts at times when DNWR binds. Accounting for this reduces the estimated increase in aggregate wage growth due to DNWR to be much closer to zero, consistent with the predictions of the model. These results suggest that DNWR may not provide a strong argument against the targeting of low inflation rates, as practiced by many monetary authorities. Importantly, though, this result is nevertheless consistent with evidence that suggests workers are averse to nominal wage cuts.
Author : Dany Brouillette
Publisher :
ISBN 13 :
Total Pages : 13 pages
Book Rating : 4.:/5 (12 download)
Download or read book Downward Nominal Wage Rigidity, Inflation and Unemployment written by Dany Brouillette and published by . This book was released on 2017 with total page 13 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Recent evidence suggests that the extent of downward nominal wage rigidity (DNWR) inthe Canadian labour market has risen following the 2008-09 recession. This note studies whether DNWR can lead to a long‐run trade‐off between inflation and unemployment, especially at lower rates of inflation-a question that has important implications for the optimal level of inflation in the long run. The results suggest that the trade‐off between unemployment and inflation remains weak despite the estimated increase in DNWR. In particular, the long‐run Phillips curve is close to vertical at inflation rates of 2 per cent or more, in line with earlier findings. As a result, an increase in long‐term inflation from 2 to 3 per cent would lower unemployment by about 0.1-0.2 percentage points. Overall, our results suggest that the benefits of raising the inflation target to attain a lower long‐term unemployment level seem rather weak"--Abstract, p. iii.
Author : Stephanie Schmitt-Grohé
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (135 download)
Download or read book Heterogeneous Downward Nominal Wage Rigidity written by Stephanie Schmitt-Grohé and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We introduce a form of downward nominal wage rigidity that can vary in intensity across a continuum of labor varieties. The model delivers a static wage Phillips curve linking current wage inflation to current unemployment. For standard parameterizations, the dynamics of the model are qualitatively and quantitatively similar to those of the new-Keynesian model with wage stickiness, which features a forward-looking wage Phillips curve, linking current wage inflation to future expected wage inflation and current unemployment. This result puts in perspective the role played by the forward-looking component of the new-Keynesian wage Phillips curve. A convenient property of the proposed model is that it is amenable to perturbation analysis because although it features occasionally binding constraints at the level of individual labor types it does not have such constraints at the aggregate level.
Author : Karl Brunner
Publisher : North-Holland
ISBN 13 :
Total Pages : 184 pages
Book Rating : 4.3/5 (91 download)
Download or read book The Phillips Curve and Labor Markets written by Karl Brunner and published by North-Holland. This book was released on 1976 with total page 184 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Christoph Knoppik
Publisher :
ISBN 13 :
Total Pages : 46 pages
Book Rating : 4.E/5 ( download)
Download or read book How Rigid are Nominal Wages? written by Christoph Knoppik and published by . This book was released on 2001 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Bruce C. Fallick
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (947 download)
Download or read book Downward Nominal Wage Rigidity in the United States During and After the Great Recession written by Bruce C. Fallick and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : David Edward Card
Publisher :
ISBN 13 :
Total Pages : 60 pages
Book Rating : 4.E/5 ( download)
Download or read book Does Inflation "grease the Wheels of the Labor Market"? written by David Edward Card and published by . This book was released on 1996 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt: If nominal wages are downward rigid, moderate levels of inflation may improve labor market efficiency by facilitating real wage cuts. In this paper we attempt to test the hypothesis that downward real wage changes occur more readily in higher-inflation environments. Using individual wage change data from two sources, we find that about 6-10 percent of workers experience nominally rigid wages in a 10- percent inflation environment. This proportion rises to over 15 percent at a 5 percent inflation rate. We use the assumption of symmetry to generate counterfactual distributions of real wage changes in the absence of rigidities. These counterfactual distributions suggest that a 1 percent increase in the inflation rate reduces the fraction of workers with downward-rigid wages by about 0.8 percent, and allows real wages to fall about 0.06 percent faster. A market- level analysis of the effects of nominal rigidities, based on wage growth and unemployment at the state level, is less conclusive. We find only a weak statistical relationship between the rate of inflation and the pace of relative wage adjustments across local labor markets.
Author : Liam Graham
Publisher :
ISBN 13 :
Total Pages : 16 pages
Book Rating : 4.X/5 (4 download)
Download or read book The Return of the Long-run Phillips Curve written by Liam Graham and published by . This book was released on 2003 with total page 16 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Stefano Fasani
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)
Download or read book On the Long-Run Unemployment, Inflation, and Volatility written by Stefano Fasani and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This note revisits the relationship between unemployment and inflation in the long-run. Using data on OECD countries to capture low-frequency dynamics, panel regressions confirm the negative relationship between unemployment and inflation as in the short-run Phillips curve. Yet, inflation volatility is associated positively with unemployment. Empirical evidence is rationalized through the lens of a New-Keynesian model augmented with downward nominal wage rigidity (DNWR). Higher inflation volatility makes nominal wages more volatile and the constraint more likely to bind. Unemployment is more likely to raise above the natural level and its expected value in the long-run is higher.
Author : Seamus Hogan
Publisher :
ISBN 13 : 9780662289371
Total Pages : 29 pages
Book Rating : 4.2/5 (893 download)
Download or read book Some Explorations, Using Canadian Data, of the S-variable in Akerlof, Dickens and Perry (1996) written by Seamus Hogan and published by . This book was released on 2000 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt:
