The Non-equivalence Revisited: Staggered Price and Wage Contracts
AbstractStaggered wage-setting and price-setting have frequently been used to construct business cycle models that can replicate long-lasting real effects of monetary shocks. We examine how the two seemingly equivalent sources of nominal rigidities compare in generating persistence in real output following monetary expansion. We show that staggered wage-setting is in general better able to generate persistence, because it can lower the procyclicality of marginal cost considerably more than staggered price-setting does.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Global Economic Review.
Volume (Year): 36 (2007)
Issue (Month): 3 ()
Contact details of provider:
Web page: http://www.tandfonline.com/RGER20
You can help add them by filling out this form.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If references are entirely missing, you can add them using this form.