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Author:Blanchard, Olivier Jean 

Working Paper
Real wage rigidities and the New Keynesian model
Most central banks perceive a trade-off between stabilizing inflation and stabilizing the gap between output and desired output. However, the standard new Keynesian framework implies no such trade-off. In that framework, stabilizing inflation is equivalent to stabilizing the welfare-relevant output gap. In this paper, we argue that this property of the new Keynesian framework, which we call the divine coincidence, is due to a special feature of the model: the absence of nontrivial real imperfections. ; We focus on one such real imperfection, namely, real wage rigidities. When the baseline new Keynesian model is extended to allow for real wage rigidities, the divine coincidence disappears, and central banks indeed face a trade-off between stabilizing inflation and stabilizing the welfare-relevant output gap. We show that not only does the extended model have more realistic normative implications, but it also has appealing positive properties. In particular, it provides a natural interpretation for the dynamic inflation-unemployment relation found in the data.
AUTHORS: Gali, Jordi; Blanchard, Olivier Jean
DATE: 2005

Conference Paper
Macroeconomic implications
AUTHORS: Kydland, Finn E.; Blanchard, Olivier Jean
DATE: 1989

Conference Paper
A new method to estimate time variation in the NAIRU - comments
AUTHORS: Blanchard, Olivier Jean
DATE: 2008

Conference Paper
For a return to pragmatism
AUTHORS: Blanchard, Olivier Jean
DATE: 1992

Working Paper
Why Has the Stock Market Risen So Much Since the US Presidential Election?
This paper looks at the evolution of U.S. stock prices from the time of the Presidential elections to the end of 2017. It concludes that a bit more than half of the increase in the aggregate U.S. stock prices from the presidential election to the end of 2017 can be attributed to higher actual and expected dividends. A general improvement in economic activity and a decrease in economic policy uncertainty around the world were the main factors behind the stock market increase. The prospect and the eventual passage of the corporate tax bill nevertheless played a role. And while part of the rise in stock returns came from a decrease in the equity risk premium, this decrease was relatively limited and returned the premium to the levels of the first half of the 2000s.
AUTHORS: Blanchard, Olivier Jean; Collins, Christopher G.; Jahan-Parvar, Mohammad; Pellet, Thomas; Wilson, Beth Anne
DATE: 2018-08-21

Conference Paper
Real wage rigidities and the New Keynesian model
AUTHORS: Blanchard, Olivier Jean; Gali, Jordi
DATE: 2005

Journal Article
The automatic fiscal stabilizers: quietly doing their thing - commentary
AUTHORS: Blanchard, Olivier Jean
DATE: 2000-04

Journal Article
Macroeconomic implications of shifts in the relative demand for skills
Besides widening wage inequality, if the demand for skills continues to increase it will probably reduce aggregate employment. Policy measures to offset the impact of increased demand for skills on wage inequality and employment would be very costly. Moreover, given local funding of primary and secondary education a sufficiently large supply response cannot be assumed.
AUTHORS: Blanchard, Olivier Jean
DATE: 1995-01

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