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...

An estimated dynamic general equilibrium model which features imperfectly competititve households, sticky nominal wages and costly labor input adjustment is shown to be consistent with several stylized aspects of U.S. postwar business cycle dynamics including the positive serial correlation of...

We analyze a stochastic general equilibrium model which incorporates three different types of government expenditure. We calibrate the model and simulate it under the hypotheses of divisible and indivisible labor supply. Our results indicate that the addition of government expenditure shocks to...

[fre] Modèles du cycle économique et marché du travail. . Nombreux sont ceux qui croient que l'approche du cycle économique initiée par Lucas, Kydland et Prescott a pour objectif fondamental de doter les modèles macro-économiques de fondements micro-économiques solides alors que...

Barro and King (1984) conjecture that shocks other than those to total factor productivity will have difficulty generating key business cycle comovements between output, consumption, investment and hours worked. Recent years have seen the emergence of a class of DSGE models in which aggregate...

Indeterminacy in new Keynesian models with Calvo-contracts can occur even at low trend inflation levels of 2 or 3%. The interaction of trend inflation with nominal wage rigidity and trend growth in output causes large distortions in the steady state and expands the indeterminacy region....

This paper develops and estimates a dynamic general equilibrium model that realistically accounts for an input-output linkage between firms operating at different stages of processing. Firms face technological change which is specific to their processing stage and charge new prices according to...

A commonly held view is that nominal rigidities are important for the transmission of monetary policy shocks. We argue that they are also important for understanding the dynamic effects of technology shocks, especially on labor hours, wages, and prices. Based on a dynamic general equilibrium...

We incorporate nominal wage contracts and government into a quantitative general equilibrium framework. Thus, our model includes three types of shocks: a fiscal shock, a monetary shock, and a technology shock. We show that it is possible in this type of environment to generate a low correlation...