Sala, Luca; Söderström, Ulf; Trigari, Antonella - C.E.P.R. Discussion Papers - 2010
We use a standard quantitative business cycle model with nominal price and wage rigidities to estimate two measures of economic inefficiency in recent U.S. data: the output gap---the gap between the actual and efficient levels of output---and the labor wedge---the wedge between households'...