have a stronger bargaining position when they try to prevent a cut in nominal wages. If inflation is so low that some … a long run trade off between inflation and unemployment for low levels of inflation. The prediction that low inflation …

mutual consent. If inflation is so low that nominal wages have to be cut, the workers have strategic advantage in the wage … negotiations, which induces higher unemployment in equilibrium. The upshot is a long run tradeoff between inflation and … unemployment for low levels of inflation. Specifically, downward nominal wage rigidity, and excess unemployment at zero inflation …

This paper reviews the literature on the effects of low steady-state inflation on wage formation, focusing on four … different effects. First, under low inflation, downward nominal wage rigidity (DNWR) may prevent real wage cuts that would have … happened had inflation been higher. Second, wages (and prices) are given in nominal contracts, and inflation affects both how …

countries. However, DNWR for individual workers may induce downward rigidity or a floor" for the aggregate wage growth at … positive or negative levels. Aggregate wage growth may be below zero because of compositional effects, for example that old …, high-wage workers are replaced by young low-wage workers. DNWR may also lead to a positive growth in aggregate wages …

, while employment at will facilitates efficient mobility. Inflation erodes the real value of a fixed contract wage over time …

Most wage-contracting models with rational expectations fail to replicate the persistence in inflation observed in the … data. We argue that coordination problems and multiple equilibria are the keys to explaining inflation persistence. We … workers. If workers’ expectations are based on the past behavior of wage growth, these beliefs will be self-fulfilling and …

exhibit persistence in inflation; they proposed a simple modification, in which workers cared about the real wages of other …), generates negative autocorrelations in inflation. …

This paper reviews the literature on the effects of low steady-state inflation on wage formation, focusing on four … different effects. First, under low inflation, downward nominal wage rigidity (DNWR) may prevent real wage cuts that would have … happened had inflation been higher. Second, wages (and prices) are given in nominal contracts, and inflation affects both how …

This paper reviews the literature on the effects of low steady-state inflation on wage formation, focusing on four … different effects. First, under low inflation, downward nominal wage rigidity (DNWR) may prevent real wage cuts that would have … happened had inflation been higher. Second, wages (and prices) are given in nominal contracts, and inflation affects both how …

stronger bargaining position when they try to prevent a cut in money wages. If inflation is so low that some money wages have … to be cut, workers' stronger bargaining position requires higher unemployment in equilibrium. However, inflation is more … stable when money wage rigidity binds, providing an incentive for monetary policy makers to choose a low target for inflation …