We develop a utility based model of fluctuations, with nominal rigidities, and unemployment. In doing so, we combine … two strands of research: the New Keynesian model with its focus on nominal rigidities, and the Diamond … first leave nominal rigidities aside. We show that, under a standard utility specification, productivity shocks have no …

nominal wage contracting model due to Taylor (1980)and three different versions of the relative real wage contracting model … reject the nominal contracting model in favor of the relative contracting model which induces more inflation persistence, we …, we find that the nominal contracting model fits German data better, while the relative contracting model does quite well …

limited asset market participation (LAMP). Contrary to previous results, we find that once nominal wage stickiness, an …

real wage rigidities has opposite effects: it generates a long-lasting boom in output in Calvo, and a moderate output slump …

during the severe recession of the 1990s, only 1.1 percent of workers took a cut in regular nominal pay. We trace the lack of …

contrary, we conclude that - because of severe downward nominal wage rigidity - real wages have become more rigid during Sweden …

number of nominal and real frictions that have proven to be important for the empirical fit of closed economy models. The …