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Pesaran, M. Hashem - 2011

This paper considers the problem of aggregation in the case of large linear dynamic panels, where each micro unit is … Pesaran (2003), an optimal aggregate function is derived, and the limiting behavior of the aggregation error is investigated … which ﾑobservedﾒ inflation persistence at the aggregate level is due to aggregation and/or common unobserved factors. Our …

Persistent link: https://www.econbiz.de/10013129942

Real Wage Rigidities and the Cost of Disinflations

Ascari, Guido; Merkl, Christian - Forschungsinstitut zur Zukunft der Arbeit <Bonn> - 2007

This paper analyzes the cost of disinflations under real wage rigidities in a micro-foundedNew Keynesian model. The consensus is that real wage rigidities can be a useful mechanismto induce the inflation persistence that is absent in the standard Calvo model...

Persistent link: https://www.econbiz.de/10005861857

Inflation Persistence and the Phillips Curve Revisited

Karanassou, Marika; Snower, Dennis J. - Forschungsinstitut zur Zukunft der Arbeit <Bonn> - 2007

A major criticism against staggered nominal contracts is that they give rise to the so called"persistency puzzle" although they generate price inertia, they cannot account for thestylised fact of inflation persistence. It is thus commonly asserted that, in the context of thenew Phillips curve...

Persistent link: https://www.econbiz.de/10005863257

The Shift to Remote Work Lessens Wage-Growth Pressures

Barrero, Jose Maria; Bloom, Nicholas; Davis, Steven J.; … - 2022

The recent shift to remote work raised the amenity value of employment. As compensation adjusts to share the amenity-value gains with employers, wage-growth pressures moderate. We find empirical support for this mechanism in the wage-setting behavior of U.S. employers, and we develop novel...

Persistent link: https://www.econbiz.de/10014081596

Inequality and Income Dynamics in Germany

Drechsel-Grau, Moritz; Peichl, Andreas; Schmieden, Johannes - 2022

We provide a comprehensive analysis of income inequality and income dynamics for Germany over the last two decades. Combining personal income tax and social security data allows us for the first time to offer a complete picture of the distribution of annual earnings in Germany. We find that...

Persistent link: https://www.econbiz.de/10014083825

Trade and Inequality in Europe and the Us

Dorn, David; Levell, Peter - 2022

The share of low-income countries in global exports nearly tripled between 1990 and 2015, driven largely by the rapid emergence of China as an exporting powerhouse. While research in economics had long acknowledged that trade with lower-income countries could raise income inequality in Europe...

Persistent link: https://www.econbiz.de/10014083996

Quality and Price Setting of High-Tech Goods

Gorodnichenko, Yuriy; Talavera, Oleksandr; Nam Hoai Vu - 2021

This paper investigates the link between product quality and price setting for central processing units (CPUs). Using thousands of price quotes from a popular price-comparison website, we find that market fundamentals, such as the number of sellers, median price, share of convenient prices and...

Persistent link: https://www.econbiz.de/10013250249

Optimal Price Indices for Targeting Inflation Under Incomplete Markets

Anand, Rahul - 2010

In models with complete markets, targeting core inflation enables monetary policy to maximize welfare by replicating the flexible price equilibrium. In this paper, we develop a two-sector two-good closed economy new Keynesian model to study the optimal choice of price index in markets with...

Persistent link: https://www.econbiz.de/10013139035

Does Downward Nominal Wage Rigidity Dampen Wage Increases?

Stüber, Heiko - 2010

Focusing on the compression of wage cuts, many empirical studies find a high degree of downward nominal wage rigidity (DNWR). However, the resulting macroeconomic effects seem to be surprisingly weak. This contradiction can be explained within an intertemporal framework in which DNWR not only...

Persistent link: https://www.econbiz.de/10013139046

Uniform and Nonuniform Staggering of Wage Contracts

Danziger, Leif - 2010

This paper provides a model that can account for the almost uniform staggering of wage contracts in some countries as well as for the markedly nonuniform staggering in others. In the model, short and long contracts as well as long contracts concluded in different periods are strategic...

Persistent link: https://www.econbiz.de/10013141426