Wage stickiness and unemployment fluctuations: an alternative approach
Fecha
2012Versión
Acceso abierto / Sarbide irekia
Tipo
Artículo / Artikulua
Versión
Versión publicada / Argitaratu den bertsioa
Impacto
|
10.1007/s13209-011-0079-y
Resumen
Erceg et al. (J Monet Econ 46:281–313, 2000) introduce sticky wages
in a New-Keynesian general-equilibrium model. Alternatively, it is shown here how
wage stickiness may bring unemployment fluctuations into a New-Keynesian model.
Using a Bayesian econometric approach, bothmodels are estimated with US quarterly
data of the Great Moderation. Estimation results are similar in the two models and
both ...
[++]
Erceg et al. (J Monet Econ 46:281–313, 2000) introduce sticky wages
in a New-Keynesian general-equilibrium model. Alternatively, it is shown here how
wage stickiness may bring unemployment fluctuations into a New-Keynesian model.
Using a Bayesian econometric approach, bothmodels are estimated with US quarterly
data of the Great Moderation. Estimation results are similar in the two models and
both provide a good empirical fit, with the crucial difference that our model delivers
unemployment fluctuations. Thus, second-moment statistics of the US rate of unemployment
are replicated reasonably well in our proposed New-Keynesian model with
sticky wages. Demand-side shocks play a more important role than technology innovations
or cost-push shock in explaining both output and unemployment fluctuations.
In the welfare analysis, the cost of cyclical fluctuations during the Great Moderation
is estimated at 0.60% of steady-state consumption. [--]
Materias
Wage rigidity,
Price rigidity,
Unemployment
Editor
Springer
Publicado en
SERIEs, (2012) 3:395–422
Departamento
Universidad Pública de Navarra. Departamento de Economía /
Nafarroako Unibertsitate Publikoa. Ekonomia Saila
Versión del editor
Entidades Financiadoras
Financial support through research projects ECO2008-02641, ECO2009-11151,
SEJ2007-66592-C03-01/ECON and ECO2010-16970 from Ministerio de Ciencia e Innovación (Spain) is
also acknowledged. The first author also thanks Fundación Ramón Areces (VII Concurso Investigación en
Economía) for financial support.