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Recent research has challenged the ability of sticky price general equilibrium models to generate a contract multiplier, i.e., an effect of a monetary innovation on output that extends beyond the contract interval. We show that a simple dynamic general equilbrium model that includes...
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the special case in which prices are sticky and wages are perfectly flexible. When the model is calibrated to exhibit an …
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This paper develops a simple framework for examining human capital accumulation, unemployment, and relative wages in a …
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This paper presents a comparative study of the level of unit labor costs in the manufacturing sectors of several countries. The paper begins by surveying earlier estimates of relative productivity and unit labor cost levels and evaluating the various methodologies that have been used in previous...
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nominal wages. This finding contrasts with results obtained using standard sticky-wage models, which employ Walrasian labor … tolerate large fluctuations in real wages that would otherwise not be tolerated in a standard model with Walrasian labor … markets; as a result, any concern for stabilizing nominal wages does not translate into a concern for stabilizing nominal …
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utility calculations. There is a stabilization problem because there are one-period nominal contracts for wages, or prices, or …
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