Real Wage Rigidities and the Cost of Disinflations

Beitrag in einer Fachzeitschrift


Details zur Publikation

Autor(en): Merkl C, Ascari G
Zeitschrift: Journal of Money, Credit and Banking
Verlag: Wiley-Blackwell
Jahr der Veröffentlichung: 2009
Band: 41
Heftnummer: 2-3
Seitenbereich: 417-435
ISSN: 0022-2879
Sprache: Englisch


Abstract


This paper analyzes the cost of disinflations under real wage rigidities in a micro-founded New Keynesian model. The conventional view is that real wage rigidities can be a useful mechanism to generate a slump in output after a credible disinflationary policy because they prevent the immediate adjustment of inflation. This view is flawed, since it depends on analyzing the model in a linearized framework. Once nonlinearities are taken into account, the results change both qualitatively and quantitatively. Disinflations actually lead to a permanently higher level of output, and real wage rigidities increase the output during the adjustment to the new steady state.



FAU-Autoren / FAU-Herausgeber

Merkl, Christian Prof. Dr.
Lehrstuhl für Volkswirtschaftslehre, insbesondere Makroökonomik


Zitierweisen

APA:
Merkl, C., & Ascari, G. (2009). Real Wage Rigidities and the Cost of Disinflations. Journal of Money, Credit and Banking, 41(2-3), 417-435. https://dx.doi.org/10.1111/j.1538-4616.2009.00211.x

MLA:
Merkl, Christian, and Guido Ascari. "Real Wage Rigidities and the Cost of Disinflations." Journal of Money, Credit and Banking 41.2-3 (2009): 417-435.

BibTeX: 

Zuletzt aktualisiert 2019-07-05 um 15:53