Quadratic labor adjustment costs, business cycle dynamics and optimal monetary policy

by Wolfgang Lechthaler and Dennis Snower

We build quadratic labor adjustment costs into an otherwise standard New-Keynesian model of the business cycle and show that this increases output persistence in a similar vein as other models of labor market frictions. Furthermore, it is demonstrated that quadratic labor adjustment costs imply a trade off between stabilizing output and stabilizing inflation.

MoreLess

Year of publication:	January 2011 ; revised January 2011
Authors:	Lechthaler, Wolfgang ; Snower, Dennis J.
Publisher:	Kiel : Kiel Institute for the World Economy
Subject:	Monetary Persistence \| Labor Adjustment Costs \| Optimal Monetary Policy \| Preisrigidität \| Price stickiness \| Arbeitsmarkt \| Labour market \| Anpassungskosten \| Adjustment costs \| Neoklassische Synthese \| Neoclassical synthesis \| Konjunkturtheorie \| Business cycle theory \| Theorie \| Theory

freely available

Full text |

More access options

Check Google Scholar

In German libraries (KVK)

I need help

Extent:	1 Online-Ressource (circa 14 Seiten) Illustrationen
Series:	Kiel working paper. - Kiel : [Verlag nicht ermittelbar], ISSN 1862-1155, ZDB-ID 2107612-1. - Vol. no. 1453 rev.
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Arbeitspapier ; Working Paper ; Graue Literatur ; Non-commercial literature
Language:	English
Other identifiers:	hdl:10419/130554 [Handle]
Classification:	E24 - Employment; Unemployment; Wages ; E32 - Business Fluctuations; Cycles ; E52 - Monetary Policy (Targets, Instruments, and Effects) ; J23 - Employment Determination; Job Creation; Demand for Labor; Self-Employment
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10011452084