Monetary persistence, imperfect competition, and staggering complementarities

Arbeitspapier

This paper explores the influence of wage and price staggering on monetary persistence. We show that, for plausible parameter values, wage and price staggering are complementary in generating monetary persistence. We do so by proposing the new measure of quantitative inertia, after discussing weaknesses of the contract multiplier, a standard measure of monetary persistence. The existence of complementarities means that beyond understanding how wage and price staggering work in isolation, it is important to investigate their interactions. Furthermore, 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 conventional finding that wage staggering generates more persistence than price staggering holds under homogenous capital accumulation. Under firm-specific capital, wage staggering generates more persistence only when the labor market is sufficiently competitive relative to the product market. -- Monetary persistence ; price staggering ; wage staggering ; firm-specific capital

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: IZA Discussion Papers ; No. 3033

Klassifikation und Themen

• Klassifikation: Wirtschaft
• Thema: Geldpolitik ; Schock ; Hysteresis ; Ungleichgewichtstheorie ; Arbeitsmobilität ; Kosten ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Merkl, Christian ; Snower, Dennis J.
• Ereignis: Veröffentlichung
• (wer): Institute for the Study of Labor (IZA)
• (wo): Bonn
• (wann): 2007

Weitere Informationen

• Handle: http://hdl.handle.net/10419/4082
• Letzte Aktualisierung: 20.09.2024, 08:24 MESZ