Tsuruga, Takayuki - Econometric Society - 2004
order for inflation to be hump-shaped, sticky wages and variable capital utilization are important as well as dynamic … standard New Keynesian (NK) model is augmented so as to include dynamic externality with sticky wages and variable capital … utilization. In our analysis, we assume purely forward-looking nominal rigidities in nominal prices and wages a la Calvo(1983 …