Calvo (1983) wage and price contracts may deliver welfare costs that are 3-4 times higher than Taylor (1980) contracts …What is the role of contracting schemes for the welfare costs of nominal rigidities over the business cycle? We examine … adopting the Mankiw and Reis (2002) sticky information scheme for the welfare costs of nominal rigidities. …

The Generalized Calvo and the Generalized Taylor model of price and wage-setting are, unlike the standard Calvo and … Taylor counter-parts, exactly consistent with the distribution of durations observed in the data. Using price and wage micro … monetary policy transmission by embedding these calibrated models in a standard DSGE model. The Generalized Taylor model is …

The Generalized Calvo and the Generalized Taylor models of price and wage-setting are, unlike the standard Calvo and … Taylor counter-parts, exactly consistent with the distribution of durations observed in the data. Using price and wage micro … monetary policy transmission by embedding these calibrated models in a standard DSGE model. The Generalized Taylor model is …

We develop the Generalized Taylor Economy (GTE) in which there are many sectors with overlapping contracts of di …. When we choose a GTE with the same distribution of completed contract lengths as the Calvo, the economies behave in a …

In this paper we develop the Generalized Taylor Economy (GTE) in which there are many sectors with overlapping … longer contracts are present. We are able to solve the puzzle of why Calvo contracts appear to be more persistent than simple … Taylor contracts: it arises because of the distribution of contract lengths. When we choose a GTE with the same distribution …

unanticipated shocks of equal size news shocks behave in a welfare-enhancing manner, and (2) purely history-dependent monetary … policy rules do not constitute an effective monetary instrument to keep welfare losses to a minimum. …

the public sector under different exchange rate regimes affect macroeconomic stability and welfare? In response to a … exchange rate peg exhibits the largest macroeconomic volatility and highest welfare losses. …

high levels of precautionary liquidity hoarding the optimal policy response of a Taylor rule is shown to indicate a zero … reserves can act as the main tool of monetary policy, that is shown to provide higher welfare gains in relation to a simple … Taylor rule. This result is shown to hold at the zero-bound and it is independent of the precautionary demand for liquidity …

distribution across firms of completed contract lengths. The distribution is consistent with a Generalised Taylor Economy or a … Generalised Calvo model with duration dependent reset probabilities. Equivalent distributions have different degrees of forward …