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A theory of price adjustment under loss aversion

Ahrens, Steffen; Pirschel, Inske; Snower, Dennis J. - 2014

We present a new partial equilibrium theory of price adjustment, based on consumer loss aversion. In line with prospect … theory, the consumers' perceived utility losses from price increases are weighted more heavily than the perceived utility … an otherwise standard dynamic neoclassical model of monopolistic competition. The resulting theory of price adjustment is …

Persistent link: https://www.econbiz.de/10010354159

Preferences, nominal rigidities, and monetary policy

Ahrens, Steffen - 2014

Persistent link: https://www.econbiz.de/10010255584

Minimum wages and firm training

Lechthaler, Wolfgang (contributor); … - 2006

The paper analyzes the influence of minimum wages on firms' incentive to train their employees. We show that this influence rests on two countervailing effects: minimum wages (i) augment wage compression and thereby raise firms' incentives to train and (ii) reduce the profitability of employees,...

Persistent link: https://www.econbiz.de/10003373639

The effect of low-wage subsidies on skills and employment

Oskamp, Frank (contributor); Snower, Dennis J. (contributor) - 2006

We explore the far-reaching implications of low-wage subsidies on aggregate employment. Low-wage subsidies have three important effects. First, they promote employment of unskilled workers (who tend to be the ones who earn low wages). Second, by raising the payoff of unskilled work relative to...

Persistent link: https://www.econbiz.de/10003367983

Unemployment accounts and employment incentives

Brown, Alessio J. G. (contributor); … - 2006

We explore the far-reaching implications of replacing current unemployment benefit (UB) systems by an unemployment accounts (UA) system. Under the UA system, employed people are required to make ongoing contributions to their UAs and the balances in these accounts are available to them during...

Persistent link: https://www.econbiz.de/10003313858

Monetary and labor policies under market frictions

Merkl, Christian - 2007

Persistent link: https://www.econbiz.de/10003465747

Inflation persistence and the Phillips curve revisited

Karanassou, Marika (contributor); … - 2007

Persistent link: https://www.econbiz.de/10003410953

Inflation persistence and the Philips curve revisited

Karanassou, Marika (contributor); … - 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 the stylised fact of inflation persistence. It is thus commonly asserted that, in the context of the new Phillips...

Persistent link: https://www.econbiz.de/10003485604

Inflation persistence and the Phillips curve revisited

Karanassou, Marika (contributor); … - 2007

Persistent link: https://www.econbiz.de/10003531676

Monetary persistence, imperfect competition, and staggering complementarities

Merkl, Christian (contributor); … - 2005

This paper explores the influence of wage and price staggering on monetary persistence. First, our analysis indicates that the degree of monetary persistence generated by wage vis-à-vis price staggering depends on the relative competitiveness of the labor and product markets. We show that the...

Persistent link: https://www.econbiz.de/10003066334