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The efficiency wages Phillips curve: Closed economy versus open economy
Vaona, Andrea - 2011
The paper extends the efficiency wages Phillips curve from a closed economy context to an open economy one with both commodity trade and capital mobility. Opening the trade account does not alter the slope of the Phillips curve, but it makes its position a function of the change of foreign and...
Persistent link: https://www.econbiz.de/10010277343
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Money illusion and the long-run Phillips curve in staggered wage setting models
Vaona, Andrea - 2011
We consider the effect of money illusion - defined referring to Stevens' ratio estimation function - on the long-run Phillips curve in an otherwise standard New Keynesian model of sticky wages. We show that if households under-perceive real economic variables, negative money...
Persistent link: https://www.econbiz.de/10010277352
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Hyperbolic discounting and positive optimal inflation
Graham, Liam; Snower, Dennis J. - 2011
The Friedman rule states that steady-state welfare is maximized when there is deflation at the real rate of interest. Recent work by Khan et al (2003) uses a richer model but still finds deflation optimal. In an otherwise standard new Keynesian model we show that, if households have hyperbolic...
Persistent link: https://www.econbiz.de/10010278022
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Hyperbolic discounting and positive optimal inflation
Graham, Liam; Snower, Dennis J. - 2011
The Friedman rule states that steady-state welfare is maximized when there is deflation at the real rate of interest. Recent work by Khan et al (2003) uses a richer model but still finds deflation optimal. In an otherwise standard new Keynesian model we show that, if households have hyperbolic...
Persistent link: https://www.econbiz.de/10010278393
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Fairness and the disinflation puzzle
Lunardelli, Andre - 2014
Following Driscoll and Holden (2004), I model forward-looking workers who consider it unfair if a wage adjustment fails to match past inflation. However, the present paper proposes a much larger effect by using the job finding rate as the measure of workers' opportunities outside the firm rather...
Persistent link: https://www.econbiz.de/10010377474
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Changes in the Balance of Power Between the Wage and Price Setters and the Central Bank: Consequences for the Phillips Curve and the NAIRU
Kromphardt, Jürgen; Logeay, Camille - 2007
In this paper we introduce and test the hypothesis that the relation between inflation and unemployment has been in many countries subject to a significant change in the early 1990's after the disinflation period. That period began between 1975 and 1980 after the first (or the second) oil price...
Persistent link: https://www.econbiz.de/10010260589
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Productivity and the Natural Rate of Unemployment
Slacalek, Jiri - 2004
I propose an econometric model that improves upon existing methods of estimating the natural rate of unemployment (NAIRU) by using information contained in the trend of productivity growth. My approach enhances the recently proposed model of Staiger, Stock and Watson (1997) in several respects....
Persistent link: https://www.econbiz.de/10010260826
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Increasing returns to scale and the long-run Phillips curve
Vaona, Andrea; Snower, Dennis J. - 2007
A growing body of empirical evidence shows that there exists a long-run positive tradeoff between inflation and real macroeconomic activity. Within a New Keynesian framewok, we examine how increasing returns generate a positive long-run relation between inflation and output.
Persistent link: https://www.econbiz.de/10010325611
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Wage Setting in Times of High and Low Inflation
Gödl, Maximilian; Gödl-Hanisch, Isabel - 2024
state dependence can be rationalized in menu cost and Calvo models of wage setting with heterogeneous firms. We examine the …
Persistent link: https://www.econbiz.de/10015097127
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Modeling which factors impact interest rates
Wang, Guizhou; Hausken, Kjell - In: Journal of Central Banking Theory and Practice 12 (2023) 2, pp. 211-237
The Taylor (1993) rule for determining interest rates is generalized to account for three additional variables: The … various combinations of the Taylor rule, the Quantity Equation (Friedman, 1970), and the Phillips (1958) curve. The monthly US … least squares method gives better results than the Taylor rule. The optimal parameter values involve a relatively high …
Persistent link: https://www.econbiz.de/10014558406