Ambler, Steve; Guay, Alain; Phaneuf, Louis - Centre de Recherche sur l'Emploi et les Fluctuations … - 1999
We examine the dual role of labor adjustment costs and staggered wage contracts as endogenous propagation mechanisms. We show that a dynamic general equilibrium model which combines these two features explains the autocorrelation functions of output growth and nominal wage growth, as well as the...