Thesis (Ph.D.) - University of Warwick, 1998.
|The Physical Object|
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Staggered Labor Contracts and Monetary Policy Robert Amano Stephen Murchison Malik Shukayev February 29, ABSTRACT There is a growing body of research exploring the importance of time-dependent nominal wage contracts for monetary policy analysis. The typical form of these contracts speci–es a nominal. The welfare level under the optimal monetary policy rule provides a natural benchmark against which to measure the performance of alternative policy rules. We "nd that strict price in#ationtargeting can induce substantialwelfare costs under staggered wage setting, due to excessive variation in nominal wage in#ation and the output gap. Sep 11, · Monetary policy cannot replicate the Pareto-optimal equilibrium that would occur under completely flexible wages and prices; that is, the model exhibits a tradeoff between stabilizing the output gap, price inflation, and wage inflation. The Pareto optimum is only attainable if either wages or prices are completely lfcmalta.com by: Journal of Monetary Economics 00 () Optimal monetary policy with staggered wage and price contracts Christopher J. Erceg, Dale W. Henderson, and Andrew T. Levin Federal Reserve Board, Washington, DC, , USA (Received August ; final version received November ) Abstract.
Under staggered wage and price setting, the optimal monetary policy rule depends on the specific structure and parameter values of the model. These features affect both the set of feasible monetary policy choices (the policy frontier) and the preferences of the policymaker (the indifference loci implied by the social welfare function).Cited by: The staggered wage and price setting model has had remarkable staying power. Originating in the s before the advent of real business cycle models, it has been the theory of choice in generation after generation of monetary business cycle models. Ch. Staggered Price and Wage Setting in Macroeconomics the real effects of money in rational expectation models with perfectly flexible prices assumes that people must learn about monetary policy during a "transition" to rational expectations [Taylor . the implications of recent developments in the economy for monetary policy in the period ahead. Work and Wages Wages have been surprisingly weak for much of the period since the global financial crisis. Chart 1 plots successive Bank of England forecasts of wage growth since Wage growth in .
The unconditional expectation of average household utility can be expressed in terms of the unconditional variances of the output gap, price inflation, and wage inflation. Monetary policy cannot replicate the Pareto-optimal equilibrium that would occur under completely flexible wages and prices; that is, the model exhibits a tradeoff between stabilizing the output gap, price inflation, and wage inflation. Staggered Price and Wage Setting in Macroeconomics John B. Taylor. NBER Working Paper No. Issued in October NBER Program(s):Economic Fluctuations and Growth Program This paper reviews the role of temporary price and wage rigidities in explaining the dynamic relationship between money, real output, and inflation. Staggered wages and monetary policy: a dynamic general equilibrium approach. By Guido Ascari. Get PDF (11 MB) Abstract. In the first chapter, first we review the famous Taylor (, a) model\ud of staggered wage setting and then we present original work in describing the\ud structure of a dynamic general equilibrium model with staggered. Staggered wage contracts have become a widely utilized framework for modelling nominal wage stickiness and for assessing its macroeconomic consequences, including for the transmission of monetary shocks. This article provides a heuristic description of the staggered contracts model, Author: Christopher Erceg.