Arbeitspapier
The impact of labor markets on the transmission of monetary policy in an estimated DSGE model
Real wages are a key determinant of marginal costs. The latter themselves are a driving force of inflation. We ask how wages and labor market shocks feed into the inflation process. We model search and matching frictions in the labour market in an otherwise standard New-Keynesian closed economy DSGE model. We estimate the model using Bayesian techniques for German data from the mid 70s to present. In our framework, we find that labor market structure is important for the evolution of the business cycle, and for monetary policy in particular. Yet labor market shocks are not important information for the conduct of stabilization policy.
- Language
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Englisch
- Bibliographic citation
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Series: IZA Discussion Papers ; No. 1902
- Classification
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Wirtschaft
Monetary Policy
Central Banks and Their Policies
Unemployment: Models, Duration, Incidence, and Job Search
- Subject
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labor market
wage rigidity
bargaining
Bayesian estimation
- Event
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Geistige Schöpfung
- (who)
-
Christoffel, Kai
Kuester, Keith
Linzert, Tobias
- Event
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Veröffentlichung
- (who)
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Institute for the Study of Labor (IZA)
- (where)
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Bonn
- (when)
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2005
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Christoffel, Kai
- Kuester, Keith
- Linzert, Tobias
- Institute for the Study of Labor (IZA)
Time of origin
- 2005
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