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Do Emotions Improve Labor Market Outcomes?
Goette, Lorenz; Huffman, David - Institute for the Study of Labor (IZA) - 2005
This chapter argues that the neglect of emotion in economic models explains their inability to predict important aspects of the labor market. We focus on one example: firms frequently cut real wages, increasing nominal wages by less than the inflation rate, but they very seldom cut nominal...
Persistent link: https://www.econbiz.de/10005763663
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Uniform and Nonuniform Staggering of Wage Contracts
Danziger, Leif - Institute for the Study of Labor (IZA) - 2010
This paper provides a model that can account for the almost uniform staggering of wage contracts in some countries as well as for the markedly nonuniform staggering in others. In the model, short and long contracts as well as long contracts concluded in different periods are strategic...
Persistent link: https://www.econbiz.de/10008548722
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Price Dynamics and Production Lags
Lindbeck, Assar; Snower, Dennis J. - Institute for the Study of Labor (IZA) - 1999
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...
Persistent link: https://www.econbiz.de/10005702997
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Nominal Wage Rigidities in a New Keynesian Model with Frictional Unemployment
Bodart, Vincent; Walque, Gregory De; Pierrard, Olivier; … - Institute for the Study of Labor (IZA) - 2006
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...
Persistent link: https://www.econbiz.de/10005703177
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Sequential Bargaining in a New-Keynesian Model with Frictional Unemployment and Staggered Wage Negotiation
De Walque, Gregory; Pierrard, Olivier; Sneessens, Henri; … - Institute for the Study of Labor (IZA) - 2009
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...
Persistent link: https://www.econbiz.de/10005703208
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Inflation Persistence and the Phillips Curve Revisited
Karanassou, Marika; Snower, Dennis J. - Institute for the Study of Labor (IZA) - 2007
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...
Persistent link: https://www.econbiz.de/10005703349
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The Role of Real Wage Rigidity and Labor Market Frictions for Unemployment and Inflation Dynamics
Christoffel, Kai; Linzert, Tobias - Institute for the Study of Labor (IZA) - 2005
cycle model. In particular, we analyze the effect of a monetary policy shock and investigate how labor market frictions … persistent movements of aggregate inflation. Moreover, the impact of a monetary policy shock on unemployment and inflation …
Persistent link: https://www.econbiz.de/10005703779
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Regional Price Differences in Urban China 1986-2001: Estimation and Implication
Gong, Cathy Honge; Meng, Xin - Institute for the Study of Labor (IZA) - 2008
Despite the intensive efforts made by economists to examine regional income inequality in China, limited attention has been paid to disentangle the contribution of regional price differentials. This paper examines regional price differential in urban China over the period 1986 to 2001. Spatial...
Persistent link: https://www.econbiz.de/10005822212
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The Welfare Impact of Price Changes on Household Welfare and Inequality 1999-2010
Loughrey, Jason; O'Donoghue, Cathal - Institute for the Study of Labor (IZA) - 2011
This paper provides a single welfare measure to show the effects of consumer price changes upon households in Ireland between 1999 and 2010. This measure combines an efficiency component using a Linear Expenditure System (LES) and an equity component using the Atkinson Social Welfare Function....
Persistent link: https://www.econbiz.de/10009024603
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A Theory of Price Adjustment under Loss Aversion
Ahrens, Steffen; Pirschel, Inske; Snower, Dennis J. - Institute for the Study of Labor (IZA) - 2014
We present a new partial equilibrium theory of price adjustment, based on consumer loss aversion. In line with prospect … theory, the consumers' perceived utility losses from price increases are weighted more heavily than the perceived utility … an otherwise standard dynamic neoclassical model of monopolistic competition. The resulting theory of price adjustment is …
Persistent link: https://www.econbiz.de/10011096764