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Labor turnover costs, workers' heterogeneity, and optimal monetary policy
Faia, Ester; Lechthaler, Wolfgang; Merkl, Christian - 2009
We study the design of optimal monetary policy in a New Keynesian model with labor turnover costs in which wages are set according to a right to manage bargaining where the firms' counterpart is given by currently employed workers. Our model captures well the salient features of European labor...
Persistent link: https://www.econbiz.de/10003879356
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Oil price shocks, monetary policy and current account imbalances within a currency union
Baas, Timo; Belke, Ansgar - 2017
trade result in an asymmetric reaction to an otherwise symmetric shock. In this context, we show that oil price shocks can …
Persistent link: https://www.econbiz.de/10011785688
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Monetary persistence and the labor market : a new perspective
Lechthaler, Wolfgang (contributor);  … - 2008
that the employment rate is slow to converge to its steady state value after a monetary shock. The after-effects of a shock … continue to exert an effect on the labor market even long after the shock is over. The sluggishness of the labor market … translates to the product market and thus the output effects of the monetary shock become more persistent. Under reasonable …
Persistent link: https://www.econbiz.de/10003719627
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The role of real wage rigidity and labor market frictions for unemployment and inflation dynamics
Christoffel, Kai (contributor); Linzert, Tobias (contributor) - 2005
cycle model. In particular, we analyze the effect of a monetary policy shock and investigate how labor market frictions … persistent movements of aggregate inflation. Moreover, the impact of a monetary policy shock on unemployment and inflation …
Persistent link: https://www.econbiz.de/10003227218
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Monetary persistence, imperfect competition, and staggering complementarities
Merkl, Christian (contributor);  … - 2007
This paper explores the influence of wage and price staggering on monetary persistence. We show that, for plausible parameter values, wage and price staggering are complementary in generating monetary persistence. We do so by proposing the new measure of "quantitative inertia," after discussing...
Persistent link: https://www.econbiz.de/10003557342
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Dealer pricing of consumer credit
Bertola, Giuseppe; Hochgürtel, Stefan; Koeniger, Winfried - 2002
Interest rates on consumer lending are lower when funds are tied to purchase of a durable good than when they are made available on an unconditional basis. Further, dealers often choose to bear the financial cost of their customers' credit purchases. This paper interprets this phenomenon in...
Persistent link: https://www.econbiz.de/10011406655
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A theory of price adjustment under loss aversion
Ahrens, Steffen; Pirschel, Inske; Snower, Dennis J. - 2014
We present a new partial equilibrium theory of price adjustment, based on consumer loss aversion. In line with prospect theory, the consumers' perceived utility losses from price increases are weighted more heavily than the perceived utility gains from price decreases of equal magnitude. Price...
Persistent link: https://www.econbiz.de/10010350414
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Asymmetric labor market institutions in the EMU and the volatility of inflation and unemployment differentials
Abbritti, Mirko; Müller, Andreas - 2012
How does the asymmetry of labor market institutions affect the adjustment of a currency union to shocks? To answer this question, this paper sets up a dynamic currency union model with monopolistic competition and sticky prices, hiring frictions and real wage rigidities. In our analysis, we...
Persistent link: https://www.econbiz.de/10009536516
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Provincial trade, financial friction and misallocation in China
Kwon, Ohyun; Fleisher, Belton M.; McGuire, William; Min … - 2020
We study the implications of financial-market imperfections on labor and capital misallocation in China. Financial friction stems from private sectors' credit constraints that limit the efficient use of capital relative to state firms. Our model can jointly explain labor flows out of and capital...
Persistent link: https://www.econbiz.de/10012194241
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Interest rate hysteresis in macroeconomic investment under uncertainty
Belke, Ansgar; Göcke, Matthias - 2019
The interest rate is generally considered as an important driver of macroeconomic investment. As an innovation, this paper derives the exact shape of the "hysteretic" impact of changes in the interest rate on macroeconomic investment under the scenarios of both certainty and uncertainty. We...
Persistent link: https://www.econbiz.de/10012099522