The distribution of contract durations across firms: a unified framework for understanding and comparing dynamic wage and price setting models
This paper shows how any steady state distribution of ages and related hazard rates can be represented as a distribution across firms of completed contract lengths. The distribution is consistnet with a Generalised Taylor Economy or a Generalised Calvo model with duration dependent reset probabilities. Equivalent distributions have different degrees of forward lookingness and imply different behaviour in response to monetary shocks. We also interpret data on the proportions of firms changing price in a period, and the resultant range of average contract lengths
|Date of creation:||02 Feb 2007|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.essex.ac.uk/afm/mmf/index.html|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Veronese, Giovanni & Fabiani, Silvia & Gattulli, Angela & Sabbatini, Roberto, 2005. "Consumer price behaviour in Italy: evidence from micro CPI data," Working Paper Series 0449, European Central Bank.
- Guerrieri, Luca, 2006.
"The Inflation Persistence of Staggered Contracts,"
Journal of Money, Credit and Banking,
Blackwell Publishing, vol. 38(2), pages 483-494, March.
- Huw Dixon & Engin Kara, .
"How to Compare Taylor and Calvo Contracts: A Comment on Michael Kiley,"
05/04, Department of Economics, University of York.
- Dixon, Huw & Kara, Engin, 2006. "How to Compare Taylor and Calvo Contracts: A Comment on Michael Kiley," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 38(4), pages 1119-1126, June.
- Huw Dixon & Engin Kara, 2005. "How to Compare Taylor and Calvo Contracts: a comment on Michael Kiley," CDMA Working Paper Series 200504, Centre for Dynamic Macroeconomic Analysis.
- Christopher J. Erceg, 1997. "Nominal wage rigidities and the propagation of monetary disturbances," International Finance Discussion Papers 590, Board of Governors of the Federal Reserve System (U.S.).
- Carlson, John A & Horrigan, Michael W, 1983. "Measures of Unemployment Duration as Guides to Research and Policy: Comment [An Experience-Weighted Measure of Employment and Unemployment Duration]," American Economic Review, American Economic Association, vol. 73(5), pages 1143-50, December.
- Eyal Baharad & Benjamin Eden, 2003.
"Price Rigidity and Price Dispersion: Evidence from Micro Data,"
Vanderbilt University Department of Economics Working Papers
0321, Vanderbilt University Department of Economics.
- Eyal Baharad & Benjamin Eden, 2004. "Price Rigidity and Price Dispersion: Evidence from Micro Data," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 7(3), pages 613-641, July.
- Michael T. Kiley, 1999.
"Partial adjustment and staggered price setting,"
Finance and Economics Discussion Series
1999-01, Board of Governors of the Federal Reserve System (U.S.).
- Ascari, G., 1997.
"Optimizing Agents, Staggered Wages and Persistence in the Real Effects of Money Shocks,"
The Warwick Economics Research Paper Series (TWERPS)
486, University of Warwick, Department of Economics.
- Ascari, Guido, 2000. "Optimising Agents, Staggered Wages and Persistence in the Real Effects of Money Shocks," Economic Journal, Royal Economic Society, vol. 110(465), pages 664-86, July.
- Baudry, L. & Le Bihan, H. & Sevestre, P. & Tarrieu, S., 2004.
"Price Rigidity. Evidence from the French CPI Macro-Data,"
113, Banque de France.
- Baudry, Laurent & Le Bihan, Hervé & Sevestre, Patrick & Tarrieu, Sylvie, 2004. "Price rigidity. Evidence from the French CPI micro-data," Working Paper Series 0384, European Central Bank.
When requesting a correction, please mention this item's handle: RePEc:mmf:mmfc06:148. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum)
If references are entirely missing, you can add them using this form.