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Is there a trade-off between inflation and output stabilization?

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  • Justiniano, Alejandro
  • Primiceri, Giorgio E
  • Tambalotti, Andrea

Abstract

Not in an estimated DSGE model of the US economy, once we account for the fact that most of the high-frequency volatility in wages appears to be due to noise, rather than to variation in workers' preferences or market power.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8407.

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Date of creation: Jun 2011
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Handle: RePEc:cpr:ceprdp:8407

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Keywords: optimal policy; output gap; potential output;

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