Casares Polo, Miguel2016-05-102016-05-102008https://academica-e.unavarra.es/handle/2454/20638This paper shows a New Keynesian model where wages are set at the value that matches household's labor supply with firm's labor demand. Subsequently, wage stickiness brings industry-level unemployment fluctuations. After aggregation, the rate of wage inflation is negatively related to unemployment, as in the original Phillips (1958) curve, with an additional term that provides forward-looking dynamics. The supply-side of the model can be captured with dynamic expressions equivalent to those obtained in Erceg, Henderson, and Levin (2000), though with different slope coefficients. Impulse-response functions from a technology shock illustrate the interactions between sticky prices, sticky wages and unemployment.29 p.application/pdfengCC Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0)New Keynesian modelSticky wagesUnemploymentinfo:eu-repo/semantics/workingPaperinfo:eu-repo/semantics/openAccess