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dc.contributor.authorDi Bartolomeo, Giovanni
dc.contributor.authorTirelli, Patrizio
dc.contributor.authorAcocella, Nicola
dc.date.accessioned2017-05-10T04:06:55Z
dc.date.available2017-05-10T04:06:55Z
dc.date.issued2012
dc.identifier.issn0164-0704
dc.identifier.doi10.1016/j.jmacro.2012.01.007
dc.identifier.urihttp://hdl.handle.net/10072/336484
dc.description.abstractEmpirical contributions show that wage re-negotiations take place while expiring contracts are still in place. This is captured by assuming that nominal wages are pre-determined. As a consequence, wage setters act as Stackelberg leaders, whereas in the typical New Keynesian model the wage-setting rule implies that they play a Nash game. We present a DSGE New Keynesian model with pre-determined wages and money entering the representative household’s utility function and show how these assumptions are sufficient to identify an inverse relationship between the inflation target and the wage markup (and thus employment) both in the short and the long run. This is due to the complementary effects that wage claims and the inflation target have on money holdings. Model estimates suggest that a moderate long-run inflation rate generates non-negligible output gains.
dc.description.peerreviewedYes
dc.languageEnglish
dc.language.isoeng
dc.publisherElsevier
dc.relation.ispartofpagefrom391
dc.relation.ispartofpageto403
dc.relation.ispartofissue2
dc.relation.ispartofjournalJournal of Macroeconomics
dc.relation.ispartofvolume34
dc.subject.fieldofresearchApplied Economics not elsewhere classified
dc.subject.fieldofresearchEconomic Theory
dc.subject.fieldofresearchApplied Economics
dc.subject.fieldofresearchcode140299
dc.subject.fieldofresearchcode1401
dc.subject.fieldofresearchcode1402
dc.titleInflation Targets and Endogenous Wage Markups in a New Keynesian Model
dc.typeJournal article
dc.type.descriptionC1 - Articles
dc.type.codeC - Journal Articles
gro.hasfulltextNo Full Text
gro.griffith.authorTirelli, Patrizio


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