Real Wage Rigidities and the New Keynesian Model

Most central banks perceive a trade-off between stabilizing inflation and stabilizing the gap between output and desired output. However, the standard new Keynesian framework implies no such trade-off. In that framework, stabilizing inflation is equivalent to stabilizing the welfare-relevant output...

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Bibliographic details
Volume: 39
Format: Journal Article
Language: English
Zielgruppe: Academic
Place of publication: Malden, USA Blackwell Publishing Inc 01.02.2007
Blackwell Publishing
Wiley Periodicals, Inc
John Wiley & Sons, Inc
published in: Journal of money, credit and banking Vol. 39; no. s1; pp. 35 - 65
Edition: Received November 2, 2005; and accepted in revised form May 4, 2006.
Data of publication: 2007-02
ISSN: 0022-2879
EISSN: 1538-4616
Discipline: Economics
Bibliography: Prepared for the FRB/JMCB conference on “Quantitative Evidence on Price Determination,” Washington, D.C., September 29–30, 2005. We have benefited from comments at various seminars and conferences, including CREI‐UPF, Bank of England, MIT, LBS‐MAPMU Conference, University of Oslo, NBER Summer Institute, Federal Reserve Board, New York Fed, Boston Fed, NYU, Princeton, Boston University, Harvard, and Boston College. We thank Marios Angeletos, Ray Fair, Jeff Fuhrer, Andy Levin, Greg Mankiw, Michael Woodford, our discussants Bob Hall and Julio Rotemberg, two anonmous referees, and the editor Ken West for useful comments. We are also grateful to Anton Nakov for excellent research assistance. We thank CREA‐Barcelona Economics, MCyT Grant (SEJ 2005‐01124), and the NSF, for financial help.
Online Access: Fulltext
Database: Istex
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