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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...
Persistent link: https://www.econbiz.de/10005372795
Persistent link: https://www.econbiz.de/10005082346
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...
Persistent link: https://www.econbiz.de/10005611922
The business cycle implications of optimal wage indexation are investigated in a dynamic general equilibrium model with wage contracts. As in Gray's seminal contribution on wage indexation, it is shown that the optimal degree of indexation depends on the relative volatilities of monetary and...
Persistent link: https://www.econbiz.de/10005827142
We use a dynamic general equilibrium model to obtain quantitative estimates of the welfare costs of nominal wage contracts. We find that the welfare costs of such contracts can vary quite a bit depending on the degree of indexation, the size and persistence of money supply uncertainty and the...
Persistent link: https://www.econbiz.de/10005827144
The authors use a dynamic general equilibrium model to obtain quantitative estimates of the welfare cost of nominal wage contracting. They find that the welfare cost of such contracts can vary quite a lot depending on the degree of indexation, the size and persistence of monetary shocks, and the...
Persistent link: https://www.econbiz.de/10005242684
We introduce procyclical labor and capital utilization, as well as costs of rapidly increasing employment, into a business-cycle model. Plausible variations in factor utilization enable us to explain observed variability of real GNP with considerably smaller economy-wide disturbances. The costs...
Persistent link: https://www.econbiz.de/10005498973
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...
Persistent link: https://www.econbiz.de/10005467137
We study the welfare implications of uncertainty in business cycle models. In the modern business cycle literature, multiplicative real shocks to production and/or preferences play an important role as the impulses that produce aggregate fluctuations. Introducing shocks in this way has the...
Persistent link: https://www.econbiz.de/10011268098
Persistent link: https://www.econbiz.de/10010954107