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Wage Flexibility and Openness
Aizenman, Joshua - 2021
This paper analyzes the degree of short-run, real wage flexibility in a two-sector economy under floating rates. This is done by deriving optimal wage indexation in a contracting framework. We find that the more closed the economy, the lower the degree of wage indexation. As a result, output...
Persistent link: https://www.econbiz.de/10013219727
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Optimal Wage Re-Negotiation
Aizenman, Joshua - 2021
This paper investigates an economy in which there are short-term wage contracts that are re-negotiated under certain conditions. This paper determines the optimal frequency of wage re-negotiation and shows that it depends positively on measures of aggregate variability and Phillips curve slope....
Persistent link: https://www.econbiz.de/10013221119
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Sectorial Wages and the Real Exchange Rate
Aizenman, Joshua; Frenkel, Jacob A. - 2021
prices. How should the structure of sectorial wages adjust in response to such a shock? This question is addressed in the … are affected by the exogenous real shock. Cost of negotiations result in labor market contracts which set nominal wages in …-indexation rules. The optimal rules alter both the absolute and the relative structure of sectorial nominal wages. We examine the …
Persistent link: https://www.econbiz.de/10013225012
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Wage Contracts with Incomplete and Costly Information
Aizenman, Joshua - 2021
Optimal wage indexation, as derived by Gray, was subject to criticism due to a lack of efficient use of information; failure to clear the market which resulted in non-optimal contracts; and the lack of an explicit use of welfare criteria. The purpose of this paper is to derive a wage contract...
Persistent link: https://www.econbiz.de/10013246094
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Institutional Efficiency, Monitoring Costs, and the Investment Share of FDI
Aizenman, Joshua; Spiegel, Mark M. - 2021
advantage. Under these asymmetries, multinationals pay higher wages than domestic producers, in line with the insight of … efficiency wages and with the evidence about the multinationals wage premium.' FDI is also more sensitive to increases in …
Persistent link: https://www.econbiz.de/10013310209
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Monetary and Fiscal Remedies for Deflation
Auerbach, Alan J. - 2011
Prevalent thinking about liquidity traps suggests that the perfect substitutability of money and bonds at a zero short-term nominal interest rate renders open-market operations ineffective for achieving macroeconomic stabilization goals. In an earlier paper, we showed that this reasoning does...
Persistent link: https://www.econbiz.de/10013133109
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The Index of Leading Indicators : "Measurement Without Theory," Twenty-Five Years Later
Auerbach, Alan J. - 2011
spite of the original criticism that its use represents "measurement without theory. " This paper seeks to evaluate the …
Persistent link: https://www.econbiz.de/10013133170
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Trade Dependency, Bargaining and External Debt
Aizenman, Joshua - 2010
This paper analyzes the factors determining the effective payment on outstanding debt in the presence of partial defaults, and the feasibility of renewed investment. We show that the bargaining outcome, which determines the repayment, is dictated by the trade dependency, as measured by the...
Persistent link: https://www.econbiz.de/10013135125
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Asset Class Diversification and Delegation of Responsibilities between Central Banks and Sovereign Wealth Funds
Aizenman, Joshua - 2010
This paper presents a model comparing the degree of asset class diversification abroad by a central bank and a sovereign wealth fund. We show that if the central bank manages its foreign asset holdings in order to meet balance of payments needs, particularly in reducing the probability of sudden...
Persistent link: https://www.econbiz.de/10013137768
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Debt and Conditionality Under Endogenous Terms of Trade Adjustment
Aizenman, Joshua - 2010
The purpose of this study is to identify conditions under which renewed international. lending will benefit both the developed and the developing countries. Our analysis will evaluate how the presence of terms of trade adjust-rent and distorted credit markets affect the conditions for the...
Persistent link: https://www.econbiz.de/10013139886