Paustian, Matthias - Society for Computational Economics - SCE - 2005
have the same average duration of contracts. Calvo (1983) wage and price contracts can deliver sizeable welfare costs, but … other contracts of the same average stickiness cannot. Calvo (1983) contracts can imply welfare costs that are up to 4 times … account for the average welfare costs of business cycle fluctuations identified in Gali, Gertler, and Lopez- Salido (2003 …