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This paper provides a new explanation of why inflation is sluggish in response to aggregate demand shocks and why … rationale for a prolonged inverse relation between inflation and unemployment. The paper suggests that the interaction of … inflation persistence and unemployment persistence may offer a possible explanation of high and prolonged European unemployment. …
Persistent link: https://www.econbiz.de/10005702997
In this paper we propose a novel way to model the labor market in the context of a New-Keynesian general equilibrium model, incorporating labor market frictions in the form of hiring and firing costs. We show that such a model is able to replicate many important stylized facts of the business...
Persistent link: https://www.econbiz.de/10003937114
In this paper we propose a novel way to model the labor market in the context of a New-Keynesian general equilibrium model, incorporating labor market frictions in the form of hiring and firing costs. We show that such a model is able to replicate many important stylized facts of the business...
Persistent link: https://www.econbiz.de/10013316264
It is common knowledge that the standard New Keynesian model is not able to generate a persistent response in output to temporary monetary shocks. We show that this shortcoming can be remedied in a simple and intuitively appealing way through the introduction of labor turnover costs (such as...
Persistent link: https://www.econbiz.de/10013325145
- although they generate price inertia, they cannot account for the stylised fact of inflation persistence. It is thus commonly … asserted that, in the context of the new Phillips curve (NPC), inflation is a jump variable. We argue that this persistency … setting (in which real variables not only affect inflation, but are also influenced by it), standard wage-price staggering …
Persistent link: https://www.econbiz.de/10010273163
" - although they generate price inertia, they cannot account for the stylised fact of inflation persistence. It is thus commonly … asserted that, in the context of the new Phillips curve (NPC), inflation is a jump variable. We argue that this "persistency … equilibrium setting (in which real variables not only affect inflation, but are also influenced by it), standard wage …
Persistent link: https://www.econbiz.de/10010273181
It is commonly asserted that inflation is a jump variable in the New Keynesian Phillips curve, and thus wage …-price inertia does not imply inflation inertia. We show that this "inflation flexibility proposition" is highly misleading, relying … affect inflation, but are also influenced by it) the phenomenon of inflation inertia re-emerges. Under plausible parameter …
Persistent link: https://www.econbiz.de/10010281028
" - although they generate price inertia, they cannot account for the stylised fact of inflation persistence. It is thus commonly … asserted that, in the context of the new Phillips curve (NPC), inflation is a jump variable. We argue that this "persistency … equilibrium setting (in which real variables not only affect inflation, but are also influenced by it), standard wage …
Persistent link: https://www.econbiz.de/10010281029
- although they generate price inertia, they cannot account for the stylised fact of inflation persistence. It is thus commonly … asserted that, in the context of the new Phillips curve (NPC), inflation is a jump variable. We argue that this persistency … setting (in which real variables not only affect inflation, but are also influenced by it), standard wage-price staggering …
Persistent link: https://www.econbiz.de/10012777470
It is common knowledge that the standard New Keynesian model is not able to generate a persistent response in output to temporary monetary shocks. We show that this shortcoming can be remedied in a simple and intuitively appealing way through the introduction of labor turnover costs (such as...
Persistent link: https://www.econbiz.de/10010277972