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Working Paper
Discretion, wage indexation, and inflation
Working Paper
Floating rate loan contracts and monetary policy
Working Paper
Borrowed reserves targeting and nominal income smoothing
Working Paper
Goods-market competition and profit sharing: a multisector macro approach
This paper develops a theoretical model that relates the degree of goods-market competition with the extent of profit sharing. The authors multisector framework indicates that increased competition in goods markets leads to an increased weighting on firm profits in an optimally indexed contract. Consequently, our model predicts that a rising extent of profit-sharing arrangements in actual U.S. contracts should accompany an increase in the degree of goods-market competition. Available, but limited, data on profit sharing in the United States is generally consistent with this fundamental ...
Working Paper
Loan commitments and optimal monetary policy
Working Paper
Borrowed reserves targeting and nominal income smoothing
Working Paper
The rise of goods-market competition and the fall of nominal wage contracting: endogenous wage contracting in a multisector economy
This paper shows how heterogeneity wage-setting and a link between nominal wage flexibility andg goods-market competition rise in a multisector economy that is affected by aggregate and sector-specific shocks. Aggregate volatility increases the variance of real contract wages, whereas sectoral volatility increase the relative variance of real Walrasian wages. Given this tradeoff, the prevalence of nominal wage contracting reflects both the relative volatility of aggregate versus sectoral disturbances and the overall degree of goods-market market competition. We find that these variables help ...