A modified version of the nominal contract developed by J. A. Gray (1976) and S. Fischer (1977) is introduced in a general equilibrium model with money which has been used in the real business-cycle literature. Money is introduced in the model through cash-in-advance constraint. Two kinds of...

A model in which nominal wages are set by contracts that have cost-of-living objectives is likely to be consistent with the evidence of a unit root in the real GNP process of many countries. Values of the autoregressive root in the GNP process are calculated numerically for many countries using...

This paper investigates the robustness of the dynamic properties of staggered-contracts models. The author first analyzes the persistence of several different types of shocks in a model with constant nominal wages over the life of the contracts. The dynamic pattern of the effects of some types...