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| Francesco Zanetti |
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| ''Labor Market Frictions into Staggered Wage Contracts'' |
| ( 2006, Vol. 5 No.13 ) |
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| This paper proposes a generalization of the Calvo wage-setting equation, which embeds labor market frictions in the form of a Nash wage bargain. Adding labor market frictions changes significantly the dynamics of the standard wage-setting equation, such that it may have non-trivial implications for the design of optimal monetary policy, and could improve the ability of a general equilibrium model to replicate important labor market stylized facts. |
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| Keywords: |
JEL: E3 - Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data)
J3 - Wages, Compensation, and Labor Costs: General |
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| Manuscript Received : Oct 09 2006 | | Manuscript Accepted : Oct 09 2006 |
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