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Persistence and nominal inertia in a generalized Taylor economy: How longer contracts dominate shorter contracts
Dixon, Huw; Kara, Engin - 2007
We develop the Generalized Taylor Economy (GTE) in which there are many sectors with overlapping contracts of di§erent lengths. In economies with the same average contract length, monetary shocks will be more persistent when longer contracts are present. Using the Bils-Klenow distribution of...
Persistent link: https://www.econbiz.de/10010322772
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Vicious and virtuous circle: The political economy of unemployment in interwar UK and USA
Matthews, Ken; Minford, Patrick; Naraidoo, Ruthira - 2006
This paper develops a political economy model of multiple unemployment equilibria to provide a theory of an endogenous … natural rate of unemployment. This model is applied to the UK and the US interwar period which is remembered as the decade of … mass unemployment. The theory here sees the natural rate and the associated path of unemployment as a reaction to shocks …
Persistent link: https://www.econbiz.de/10010322782
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Real business cycles with a human capital investment sector and endogenous growth: Persistence, volatility and labor puzzles
Dang, Jing; Gillman, Max; Kejak, Michal - 2011
A positive joint two-sector productivity shock causes Rybczynski (1955) and Stolper and Samuelson (1941) effects that release leisure time and initially raises the relative price of human capital investment so as to favor it over goods production. This enables a basic RBC model, modified by...
Persistent link: https://www.econbiz.de/10010288869