Monetary Policy Effects in Developing Countries with Minimum Wages
Using a Dynamic General Equilibrium (DGE) model, this study examines the effects of monetary policy in economies where minimum wages are bound. The findings show that the monetary-policy effect on a binding-minimum-wage economy is relatively small and quite persistent. This result suggests that these two characteristics of monetary policy in the minimum-wage model are rather different from those in the union-negotiation model which is often assumed to account for industrial economies.
|Date of creation:||Mar 2008|
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|Publication status:||Published in IDE Discussion Paper. No. 142. 2008.3|
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