Staggered Wage Setting in Nominal and Real Terms: A Comparative Analysis.

This paper analyses the behaviour of an economy characterized by staggered wage contract rules specified in nominal and in real terms. It is shown that staggered contracts in real terms imply complex eigenvalues which cause oscillatory paths both for output and unemployment and stronger output losses in response to an unexpected and permanent fall in the growth rate of money supply. Copyright 2001 by Blackwell Publishing Ltd and the Board of Trustees of the Bulletin of Economic Research