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Interacting nominal and real labour market rigidities

  • Vogel, Lukas

The note analyses interactions between nominal wage stickiness and costly employment adjustment under rule-based and optimal monetary policy. Policy regimes affect and optimal policy lowers the welfare cost of rigidities. No quantitatively important second-best interaction between both rigidities is found.

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Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 111 (2011)
Issue (Month): 3 (June)
Pages: 264-267

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Handle: RePEc:eee:ecolet:v:111:y:2011:i:3:p:264-267
Contact details of provider: Web page: http://www.elsevier.com/locate/ecolet

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  1. Marco Ratto & Werner Roeger & Jan in 't Veld, 2010. "Using a DSGE model to look at the recent boom-bust cycle in the US," European Economy - Economic Papers 397, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
  2. Smets, Frank & Wouters, Raf, 2004. "Comparing shocks and frictions in US and euro area business cycles: a Bayesian DSGE approach," Working Paper Series 0391, European Central Bank.
  3. Andrew T. Levin & Alexei Onatski & John C. Williams & Noah Williams, 2005. "Monetary policy under uncertainty in micro-founded macroeconometric models," Working Paper Series 2005-15, Federal Reserve Bank of San Francisco.
  4. Romain Duval & Lukas Vogel, 2012. "How Do Nominal and Real Rigidities Interact? A Tale of the Second Best," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 44(7), pages 1455-1474, October.
  5. Olivier Blanchard & Jordi Galí, 2005. "Real wage rigidities and the New Keynesian model," Working Papers 05-14, Federal Reserve Bank of Boston.
  6. Frank Smets & Raf Wouters, 2007. "Shocks and Frictions in US Business Cycles : a Bayesian DSGE Approach," Working Paper Research 109, National Bank of Belgium.
  7. Matthew B. Canzoneri & Robert E. Cumby & Behzad T. Diba, 2004. "The Cost of Nominal Inertia in NNS Models," NBER Working Papers 10889, National Bureau of Economic Research, Inc.
  8. Matthew B. Canzoneri & Robert E. Cumby & Behzad T. Diba, 2007. "The Cost of Nominal Rigidity in NNS Models," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 39(7), pages 1563-1586, October.
  9. Wolfgang Lechthaler & Dennis Snower, 2008. "Quadratic Labor Adjustment Costs and the New-Keynesian Model," Kiel Working Papers 1453, Kiel Institute for the World Economy.
  10. Smets, F. & Sahuc, J-G., 2007. "Differences in Interest Rate Policy at the ECB and the Fed: An Investigation with a Medium-Scale DSGE Model," Working papers 182, Banque de France.
  11. Guido Ascari & Christian Merkl, 2009. "Real Wage Rigidities and the Cost of Disinflations," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 41(2-3), pages 417-435, 03.
  12. Robert E. Hall, 2004. "Measuring Factor Adjustment Costs," The Quarterly Journal of Economics, MIT Press, vol. 119(3), pages 899-927, August.
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