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Downward nominal wage rigidity meets the zero lower bound

Amano, Robert A.; Gnocchi, Stefano - 2017

We add downward nominal wage rigidity to a standard New Keynesian model with sticky prices and wages, where the zero … lower bound on nominal interest rates is allowed to bind. We find that wage rigidity not only reduces the frequency of zero … the presence of wage rigidity may have overemphasized the need for increasing the inflation target to offset the costs …

Persistent link: https://www.econbiz.de/10011637421

Labor market shocks and monetary policy

Birinci, Serdar; Karahan, Fatih; Mercan, Yusuf; See, Kurt - 2023 - Last updated: October 5, 2023

We develop a heterogeneous-agent New Keynesian model featuring a frictional labor market with on-the-job search to quantitatively study the positive and normative implications of employer-to-employer (EE) transitions for inflation. We find that EE dynamics played an important role in shaping the...

Persistent link: https://www.econbiz.de/10014456659

Labor market participation, unemployment and monetary policy

Campolmi, Alessia; Gnocchi, Stefano - 2014

We incorporate a participation decision in a standard New Keynesian model with matching frictions and show that treating the labor force as constant leads to incorrect evaluation of alternative policies. We also show that the presence of a participation margin mitigates the Shimer critique.

Persistent link: https://www.econbiz.de/10010254334

Time use and macroeconomic uncertainty

Cacciatore, Matteo; Gnocchi, Stefano; Hauser, Daniela - 2023 - Last updated: May 30, 2023

We estimate the effects of economic uncertainty on time use and discuss its macroeconomic implications. Using data from the American Time Use Survey, we first infer cyclical variation in home production and leisure time. We then document that higher uncertainty increases housework and reduces...

Persistent link: https://www.econbiz.de/10014287049

What accounts for the US-Canada education-premium difference?

Kryvtsov, Oleksiy (contributor); … - 2009

This paper analyzes the differences in wage ratios of university graduates to less than university graduates, the …

Persistent link: https://www.econbiz.de/10003804312

Monetary commitment and the level of public debt

Gnocchi, Stefano; Lambertini, Luisa - 2016

We analyze the interaction between committed monetary policy and discretionary fiscal policy in a model with public debt, endogenous government expenditures, distortive taxation and nominal rigidities. Fiscal decisions lack commitment but are Markovperfect. Monetary commitment to an interest...

Persistent link: https://www.econbiz.de/10011431600

From micro to macro hysteresis : long-run effects of monetary policy

Alves, Felipe; Violante, Giovanni L. - 2024 - Last updated: October 24, 2024

We develop a Heterogeneous Agent New Keynesian model with a three-state frictional labour market that is consistent with the empirical evidence that (i) low-skilled workers are more exposed to the business cycle, (ii) displacement leads to long-lasting earnings losses, and (iii) unemployment is...

Persistent link: https://www.econbiz.de/10015098505

Unemployment and endogenous reallocation over the business cycle

Carrillo-Tudela, Carlos; Visschers, Ludo - 2013

We build an analytically and computationally tractable stochastic equilibrium model of unemployment in heterogeneous labor markets. Facing search frictions within markets and reallocation frictions between markets, workers endogenously separate from employment and endogenously reallocate between...

Persistent link: https://www.econbiz.de/10010291522

Time variation in Okun's law : a Canada and US comparison

Beaton, Kimberly - 2010

This article investigates the stability of Okun's law for Canada and the United States using a time varying parameter approach. Time variation is modeled as driftless random walks and is estimated using the median unbiased estimator approach developed by Stock and Watson (1998). Okun's law...

Persistent link: https://www.econbiz.de/10003951223

Reconciling Jaimovich-Rebelo preferences, habit in consumption and labor

Holden, Tom D.; Levine, Paul; Swarbrick, Jonathan M. - 2018

This note studies a form of a utility function of consumption with habit and leisure that (a) is compatible with long-run balanced growth, (b) hits a steady-state observed target for hours worked and (c) is consistent with micro-econometric evidence for the inter-temporal elasticity of...

Persistent link: https://www.econbiz.de/10011864588

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