DALY, MARY C.; HOBIJN, BART - In: Journal of Money, Credit and Banking 46 (2014) S2, pp. 51-93
We introduce a model of monetary policy with downward nominal wage rigidities and show that both the slope and curvature of the Phillips curve depend on the level of inflation and the extent of downward nominal wage rigidities. This is true for the both the long‐run and the short‐run...