Labor market frictions and monetary policy design

Arbeitspapier

This paper estimates a New Keynesian DSGE model with search frictions and monetary rules augmented with different labor market indicators. In accordance with a theoretical literature I find that a central bank reacts to a labor market tightness, employment or unemployment. Posterior odds tests speak in favor of models with augmented Taylor rules versus a model with a model with a standard rule. The augmented rules were also shown to be more efficient in terms of welfare.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: SFB 649 Discussion Paper ; No. 2016-054

Classification and Topics

• Classification: Wirtschaft ; Monetary Policy ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Bayesian Analysis: General
• Subject: Search frictions ; Optimal monetary policy ; Bayesian estimation ; Taylor rules

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Almosova, Anna
• Event: Veröffentlichung
• (who): Humboldt University of Berlin, Collaborative Research Center 649 - Economic Risk
• (where): Berlin
• (when): 2016

Further information

• Handle: http://hdl.handle.net/10419/148890
• Last update: 10.03.2025, 11:45 AM CET