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Shocks and frictions under right-to-manage wage bargaining: a transatlantic perspective

Consolo, Agostino and Hertweck, Matthias S.. (2010) Shocks and frictions under right-to-manage wage bargaining: a transatlantic perspective. WWZ Discussion Papers, 2010 (01). Basel.

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Official URL: https://edoc.unibas.ch/62728/

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Abstract

This paper introduces staggered right-to-manage wage bargaining into a New Keynesian business cycle model. Our key result is that the model is able to generate persistent responses in output, inflation, and total labor input to both neutral technology and monetary policy shocks. Furthermore, we compare the model’s dynamic behavior when calibrated to the US and to an European economy. We find that the degree of price rigidity explains most of the differences in response to a monetary policy shock. When the economy is hit by a neutral technology shock, both price and wage rigidities turn out to be important.
Faculties and Departments:06 Faculty of Business and Economics > Departement Wirtschaftswissenschaften
06 Faculty of Business and Economics > Departement Wirtschaftswissenschaften > Professuren Wirtschaftswissenschaften > Wirtschaftstheorie (Berentsen)
12 Special Collections > WWZ Publications > WWZ Discussion Papers and Working Papers
UniBasel Contributors:Hertweck, Matthias S
Item Type:Working Paper
Publisher:WWZ
Number of Pages:33
Note:Publication type according to Uni Basel Research Database: Discussion paper / Internet publication
Language:English
Identification Number:
  • handle: RePEc:bsl:wpaper:2010/01
Last Modified:29 Oct 2018 15:55
Deposited On:05 Apr 2018 09:12

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