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Wage Contracts, Capital Mobility, and Macroeconomic Policy

Agénor, Pierre-Richard - 1995

This paper examines the long-run effects of macroeconomic policy shocks on the behavior of output, inflation, real wages and the real exchange rate in a small open economy. The analysis is based on a two-sector, three-good optimizing model with imperfect capital mobility, nominal wage contracts...

Persistent link: https://www.econbiz.de/10014398713

Fiscal consolidation and public wages

Chang, Juin-jen; Lin, Hsieh-Yu; Traum, Nora; Yang, … - 2019

A New Keynesian model with government production, public compensation, and unemployment is fit to U.S. data to study the macroeconomic and fiscal effects of public wage reductions. We find that accounting for the type of government spending is crucial for its macroeconomic implications. Although...

Persistent link: https://www.econbiz.de/10012102036

Endogenous growth, downward wage rigidities and optimal inflation

Abbritti, Mirko; Consolo, Agostino; Weber, Sebastian - 2021

Standard New Keynesian (NK) models feature an optimal inflation target well below two percent, limited welfare losses from business cycle fluctuations and long-term monetary neutrality. We develop a NK framework with labour market frictions, endogenous productivity and downward wage rigidity...

Persistent link: https://www.econbiz.de/10012605466

Wage Flexibility and Economic Performance : Evidence Across Industrial Countries

Kandil, Magda E. - 2000

This paper provides new empirical evidence on the degree of nominal wage flexibility in a sample of nineteen industrial countries. Across countries, aggregate uncertainty increases the degree of wage flexibility in the face of various shocks. Wage flexibility stabilizes fluctuations in real...

Persistent link: https://www.econbiz.de/10014399867

The Implications of Trade Barriers for Sectoral Diversification and Macroeconomic Stability in Developing Economies

Srour, Gabriel - 2006

The paper examines the implications of lower trade barriers for sectoral diversification and macroeconomic stability in developing economies with a large primary goods sector. It shows that lower trade barriers can have ambiguous effects on macroeconomic stability. It shows also that...

Persistent link: https://www.econbiz.de/10014399995

Explaining International Comovements of Output and Asset Returns : The Role of Money and Nominal Rigidities

Kollman, Robert Miguel W. K. - 1999

Empirically, output and asset returns are highly positively correlated across the United States and the other major industrialized countries. Standard business cycle models that assume flexible prices and wages, in the Real Business Cycle tradition, have great difficulties explaining this fact....

Persistent link: https://www.econbiz.de/10014400201

Economic Integration, Sectoral Diversification, and Exchange Rate Policy in a Developing Economy

Srour, Gabriel - 2004

The paper develops a simple three-sector model of a developing country with nominal wage rigidity, in which one sector is thought of as the primary sector and the other two are sectors in which the country can diversify. The paper then analyzes the relationship between the market structure of...

Persistent link: https://www.econbiz.de/10014401433

The Inflation-Unemployment Trade-Off At Low Inflation

Ricci, Luca Antonio - 2009

Wage setters take into account the future consequences of their current wage choices in the presence of downward nominal wage rigidities. Several interesting implications arise. First, a closed-form solution for a long-run Phillips curve relates average unemployment to average wage inflation;...

Persistent link: https://www.econbiz.de/10014402571

Externalities. Incentives, and Economic Reforms

International Monetary Fund - 1990

The paper emphasizes the role of institutions and incentives in the presence of externalities. An economy with multiple … effective institutions exist for overcoming coordination failure. External financing may weaken incentives for adjustment over … that strengthen incentives to provide effort. Uncertainty regarding future taxes reduces present effort and the …

Persistent link: https://www.econbiz.de/10014396155

Debt Relief and Adjustment Incentives : A Theoretical Exploration

International Monetary Fund - 1988

The purpose of this paper is to analyze the argument that debt relief would increase the incentive of a debtor country to make an adjustment effort (to invest) and that for this reason creditors may benefit by granting relief. It is shown that there are actually opposing incentive effects of...

Persistent link: https://www.econbiz.de/10014396170