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Optimal Wage Indexation, Foreign-Exchange Intervention and Monetary Policy
Aizenman, Joshua - 2010
This paper deals with the design of optimal monetary policy and with the interaction between the optimal degrees of wage indexation and foreign exchange intervention. The model is governed by the characteristics of the stochastic shocks which affect the economy and by the information set that...
Persistent link: https://www.econbiz.de/10012760345
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Wage Indexation and Time-Consistent Monetary Policy
Ball, Laurence; Cecchetti, Stephen G. - 2021
This paper investigates the effects of wage indexation on the time-consistent level of inflation. Departing from … previous work on time-consistent policy, we study a structural model of the economy. Indexation reduces the cost of inflation … raise inflation but also to raise welfare: the loss from higher inflation is outweighed by the gain from greater protection …
Persistent link: https://www.econbiz.de/10013218529
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Cost-of-Living Adjustment Clauses in Union Contracts
Ehrenberg, Ronald G.; Danziger, Leif; San, Gee - 2021
Our paper seeks to provide an explanation for why the prevalence of COLA provisions and their characteristics vary widely across U.S. industries. We develop models of optimal risk sharing between a firm and union that allows us to investigate the determinants of a number of characteristics of...
Persistent link: https://www.econbiz.de/10013237296
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Real Balances, the Exchange Rate and Indexation : Real Variables in Disinflation
Fischer, Stanley - 2021
ante wage indexation speeds up disinflation. With expost indexation the real wage automatically rises when the inflation …
Persistent link: https://www.econbiz.de/10013248714
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Wage Indexation and Exchange Market Intervention in a Small Open Economy
Turnovsky, Stephen J. - 2021
The analysis of this paper stresses the interdependence between wage indexation on the one hand, and exchange market intervention on the other,as tools of'macroeconomic stabilization policy in a small open economy subject to stochastic disturbances. It is shown how the choice of eitherpolicy...
Persistent link: https://www.econbiz.de/10013212914
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Supply Shocks, Wage Indexation and Monetary Accommodation
Aizenman, Joshua; Frenkel, Jacob A. - 2021
This paper develops a unified framework for the analysis of wage indexation and monetary policy in the presence of supply shocks. We first present simple formulae for the optimal wage indexation rule and for the optimal money supply rule. In order to set the stage for an evaluation of departures...
Persistent link: https://www.econbiz.de/10013313305
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From Chronic Inflation to Chronic Deflation : Focusing on Expectations and Liquidity Disarray Since Wwii
Calvo, Guillermo A. - 2016
The paper discusses policy relevant models, going from (1) chronic inflation in the 20th century after WWII, to (2 …
Persistent link: https://www.econbiz.de/10012984757
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Intertemporal Substitution in Macroeconomics
Mankiw, N. Gregory - 2011
Modern neoclassical theories of the business cycle posit that aggregate fluctuations in consumption and employment are the consequence of dynamic optimizing behavior by economic agents who face no quantity constraint. In this paper, we estimate an explicit model :f this type. In particular, we...
Persistent link: https://www.econbiz.de/10013132070
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A Macroeconomic Theory of Optimal Unemployment Insurance
Landais, Camille - 2010
We develop a theory of optimal unemployment insurance (UI) that accounts for workers' job-search behavior and firms … determine whether tightness is inefficiently high or low and whether UI raises or lowers tightness. The theory has implications …
Persistent link: https://www.econbiz.de/10013136021
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Macroeconomics with Heterogeneity : A Practical Guide
Guvenen, Fatih - 2011
This article reviews macroeconomic models with heterogeneous households. A key question for the relevance of these models concerns the degree to which markets are complete. This is because the existence of complete markets imposes restrictions on (i) how much heterogeneity matters for aggregate...
Persistent link: https://www.econbiz.de/10013118124