00000nam 2200000za 4500 9.835960 CaOODSP 20241009123915 cr ||||||||||| 170428s2017 oncd ob f000 0 eng d CaOODSP eng eng fre n-cn--- FB3-5/2017-16E-PDF Amano, Robert A. Downward nominal wage rigidity meets the zero lower bound [electronic resource] / by Robert Amano and Stefano Gnocchi. [Ottawa] : Bank of Canada, 2017. ii, 41 p. : charts Bank of Canada staff working paper, 1701-9397 ; 2017-16 "April 2017." "This paper has been previously circulated with the title “2 + 2 < 4? Monetary Policy in the Presence of Downward Nominal Wage Rigidity and the Zero Lower Bound of the Nominal Interest Rate""-Acknowledgements, p. i. Includes bibliographical references (17-18). “We add downward nominal wage rigidity to a standard New Keynesian model with stickyprices and wages, where the zero lower bound on nominal interest rates is allowed to bind. We find that wage rigidity not only reduces the frequency of zero bound episodes but also mitigates the severity of corresponding recessions. As a result, previous studies abstracting from the presence of wage rigidity may have overemphasized the need for increasing the inflation target to offset the costs associated with hitting the zero bound. Moreover, our findings add to the recent debate on the presumed benefits of wage flexibility that has arisen in the aftermath of the Great Recession"--Abstract, p. ii. Includes abstract in French. gccst Monetary policy gccst Inflation gccst Labour market Gnocchi, Stefano. Bank of Canada. Staff working paper (Bank of Canada) 1701-9397 ; 2017-16 (CaOODSP)9.806221 PDF 619 KB https://publications.gc.ca/collections/collection_2017/banque-bank-canada/FB3-5-2017-16-eng.pdf