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Gains from wage Flexibility and the Zero Lower Bound

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We analyze the welfare impact of greater wage flexibility in the presence of an occasionally binding zero lower bound (ZLB) constraint on the nominal interest rate. We show that the ZLB constraint generally amplifies the adverse effects of greater wage flexibility on welfare when the central...

Persistent link: https://www.econbiz.de/10012481581

Understanding the gains from wage flexibility : the exchange rate connection

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