Conference Paper
Nominal rigidities and the dynamic effects of a shock to monetary policy
Abstract: We present a model embodying moderate amounts of nominal rigidities which accounts for the observed inertia in inflation and persistence in output. The key features of our model are those that prevent a sharp rise in marginal costs after an expansionary shock to monetary policy. Of these features, the most important are staggered wage contracts of average duration three quarters, and variable capital utilization.
Status: Published in Nominal rigidities : a conference (2001: June 16)
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Bibliographic Information
Provider: Federal Reserve Bank of San Francisco
Part of Series: Proceedings
Publication Date: 2001
Issue: Jun