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We study the welfare performance of various simple monetary policy rules under bounded rationality (BR) along the lines of Gabaix (2020) in a New Keynesian model with sticky wages and an effective lower bound (ELB) on interest rates. Policy strategies with a strong history dependence lose their...
Persistent link: https://www.econbiz.de/10014320809
This paper studies the impact of downward wage rigidity on wage and employment dynamics after the outbreak of major recessions in Spain. Downward wage rigidity stems from collective agreements, which set province-sector-skill specific minimum wage floors for all workers. By exploiting variation...
Persistent link: https://www.econbiz.de/10014566234
This paper demonstrates that insiders can erect barriers to entry and skim rents by sinking costs in human capital when labour markets are otherwise perfectly contestable. The sunk costs nature of human capital investments may result from the need to satisfy ever increasing specialised skill...
Persistent link: https://www.econbiz.de/10013428249
This paper examines the role of life satisfactioninthe labor market behavior of workers receiving welfare benefits while working. Welfare stigma and other hard-to-observe factors may affect outcomes as on-the-job search and the duration until leaving welfare status. We utilize life satisfaction...
Persistent link: https://www.econbiz.de/10012265186
We offer a decomposition for the variance of the current unemployment rate that not only measures the contributions of …
Persistent link: https://www.econbiz.de/10012624854
This study provides empirical evidence for the economic rationality of wage rigidities. Theoretically wage rigidities can result from contracts, implicit contracts, from efficiency wages and from insider-outsider behaviour. Based on a survey of 801 firms strong support has been found for...
Persistent link: https://www.econbiz.de/10001541220
world. Compared to existing models of this type, GEAR incorporates a comprehensive fiscal block, involuntary unemployment …
Persistent link: https://www.econbiz.de/10010516561
unemployment. Second, we construct a New Keynesian model with heterogeneous workers and firms, incomplete asset markets, and labor … level and volatility of both the separation and unemployment rate at the cost of tying workers to less productive firms …
Persistent link: https://www.econbiz.de/10015398464