Paustian, Matthias; Stoltenberg, Christian - Sonderforschungsbereich 649: Ökonomisches Risiko, … - 2006
a reasonable amount of nominal rigidity due to staggered
price setting a la Calvo: The Friedman rule yields higher … wage rate for labor services ljt of type j,
Tt a lump-sum tax, Rt the gross nominal interest rate on government bonds, and … particular, the limiting value of zmm
from below is negative (see Woodford, 2003a, Assumption 6.1).
Households are wage …