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Coût des fluctuations autour d'un produit naturel sous-optimal

Author

Listed:
  • Xavier Fairise

    (TEPP - Travail, Emploi et Politiques Publiques - UPEM - Université Paris-Est Marne-la-Vallée - CNRS - Centre National de la Recherche Scientifique, GAINS - Groupe d'Analyse des Itinéraires et des Niveaux Salariaux - UM - Le Mans Université)

  • Jean-Olivier Hairault

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, IZA - Institute for the Study of Labor)

  • François Langot

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, IZA - Institute for the Study of Labor, GAINS - Groupe d'Analyse des Itinéraires et des Niveaux Salariaux - UM - Le Mans Université, CEPREMAP - Centre pour la recherche économique et ses applications - ECO ENS-PSL - Département d'économie de l'ENS-PSL - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres)

Abstract

New-Keynesian macroeconomics usually provides recommendations for monetary policy in an economy where a subsidy eliminates the mark-up at the steady state: the natural output is then optimal. In this paper, we propose to study the fluctuations around an inefficient natural output. We show that the cost of business cycles is usually underestimated. As monopolists, firms seek to preserve their expected mark-up: the interplay between the price setting by each firm and aggregate fluctuations leads to lower consumption and employment than their counterparts in an economy with flexible prices. The cost of fluctuations increases with the degree of the distortions at the steady state. However, when the utility function is iso-elastic, the optimal monetary policy is not changed: targeting zero inflation is still desirable and leads to replicate the flexible-price allocation.

Suggested Citation

  • Xavier Fairise & Jean-Olivier Hairault & François Langot, 2012. "Coût des fluctuations autour d'un produit naturel sous-optimal," Post-Print hal-00966031, HAL.
    • Handle: RePEc:hal:journl:hal-00966031
    as

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