A major criticism against staggered nominal contracts is that they give rise to the so called "persistency puzzle" - although they generate price inertia, they cannot account for the stylised fact of inflation persistence. It is thus commonly asserted that, in the context of the new Phillips...

Starting July the 1st 1997, Bulgaria adopted a Currency Board (CB) monetary system. This paper aims at investigating if the adoption of the CB monetary system, which involves the cost of loosing monetary autonomy, has provided a relatively better (with respect to other CEEC) monetary integration...

In this paper, we propose a search and matching model with nominal stickiness à la Calvo in the wage bargaining. We analyze the properties of the model, first, in the context of a typical real business cycle model driven by stochastic productivity shocks and second, in a fully specified...

We consider a model with frictional unemployment and staggered wage bargaining where hours worked are negotiated every period. The workers' bargaining power in the hours negotiation affects both unemployment volatility and inflation persistence. The closer to zero this parameter, (i) the more...

In this paper we incorporate a labor market with matching frictions and wage rigidities into the New Keynesian business cycle model. In particular, we analyze the effect of a monetary policy shock and investigate how labor market frictions affect the transmission process of monetary policy. The...

In models with complete markets, targeting core inflation enables monetary policy to maximize welfare by replicating the flexible price equilibrium. In this paper, we develop a two-sector two-good closed economy new Keynesian model to study the optimal choice of price index in markets with...

This paper provides a new explanation of why inflation is sluggish in response to aggregate demand shocks and why aggregate output changes as result of such shocks. We argue that these phenomena are related to lags between inputs and outputs in the production process, "production lags" for...

Bei Vorliegen nach unten starrer Nominallöhne erschwert niedrige Inflation Reallohnanpassungen und führt so möglicherweise zu erhöhter gleichgewichtiger Arbeitslosigkeit. Dieser Aufsatz analysiert die wachsende Evidenz zu nach unten starren Nominallöhnen. Es werden nicht nur die...

This paper investigates the causal effect of changes in health on economic development using a long panel of European countries. Identification is based on the particular timing of the introduction of public health care systems in different countries, which is the random outcome of a political...

We analyze the effect of being born in a recession on the mortality rate later in life in conjunction with social class. We use individual data records from Dutch registers of birth, marriage, and death certificates, covering the period 1815-2000, and we merge these with historical data on...