In this paper, we explore the role of labor markets for monetary policy in the euro area in a New Keynesian model in which labor markets are characterized by search and matching frictions. We first investigate to which extent a more flexible labor market would alter the business cycle behaviour...

This paper reviews recent approaches to modeling the labour market and assesses their implications for in.ation dynamics through both their effect on marginal cost and on price-setting behaviour. In a search and matching environment, we consider the following modeling setups: right-to-manage...

The economy in the euro area has turned around. While GDP stagnated during the second half of 2001, there are more and more signs that output will increase considerably in the first half of this year. All in all, the slowdown has not been very pronounced. One indication for this is that in 2001,...

This paper reviews recent approaches to modeling the labour market, and assesses their implications for inflation dynamics through both their effect on marginal cost and on price-setting behavior. In a search and matching environment, we consider the following modeling setups: right-to-manage...

[Weltkonjunktur auf Talfahrt] Die Phase starker Expansion der Weltwirtschaft ist im Jahr 2008 zu Ende gegangen. Die Zuspitzung der Finanzmarktkrise im September hat Schockwellen durch die Weltwirtschaft gesandt, und negative Rückkopplungseffekte haben zu einer ungewöhnlich starken...