Staggered wages and output dynamics under disinflation
UNSPECIFIED. (2002) Staggered wages and output dynamics under disinflation. JOURNAL OF ECONOMIC DYNAMICS & CONTROL, 26 (4). pp. 653-680. ISSN 0165-1889Full text not available from this repository.
We study the output costs of a reduction in monetary growth in a dynamic general equilibrium model with staggered wages. The money wage is fixed for two periods, and is chosen according to intertemporal optimisation. Agents have labour market monopoly power. We show that the introduction of microfoundations helps to resolve the puzzle raised by directly postulated models, namely that disinflation in staggered pricing models causes a boom. In our model disinflation, whether unanticipated or anticipated, unambiguously causes a slump. (C) 2002 Elsevier Science B.V. All rights reserved.
|Item Type:||Journal Article|
|Subjects:||H Social Sciences > HC Economic History and Conditions|
|Journal or Publication Title:||JOURNAL OF ECONOMIC DYNAMICS & CONTROL|
|Publisher:||ELSEVIER SCIENCE BV|
|Number of Pages:||28|
|Page Range:||pp. 653-680|
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