Recent quantitative dynamic general equilibrium models have cast serious doubts on the explanatory power of staggered wage/price setting in accounting for both output and inflation persistence. The authors enlarge a dynamic general equilibrium model with staggered wages by incorporating Keynesian relative wage concern on the part of workers.
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Paper provided by European University Institute in its series Economics Working Papers with number
eco99/5.
Length: 49 pages Date of creation: 1999 Date of revision: Handle: RePEc:eui:euiwps:eco99/5
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Find related papers by JEL classification: E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
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