Downward nominal wage rigidity meets the zero lower bound / by Robert Amano and Stefano Gnocchi. : FB3-5/2017-16E-PDF
“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.
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| Ministère/Organisme | Bank of Canada. |
|---|---|
| Titre | Downward nominal wage rigidity meets the zero lower bound / by Robert Amano and Stefano Gnocchi. |
| Titre de la série | Bank of Canada staff working paper, 1701-9397 ; 2017-16 |
| Type de publication | Série - Voir l'enregistrement principal |
| Langue | [Anglais] |
| Format | Électronique |
| Document électronique | |
| Note(s) | "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). Includes abstract in French. |
| Information sur la publication | [Ottawa] : Bank of Canada, 2017. |
| Auteur / Contributeur | Amano, Robert A. Gnocchi, Stefano. |
| Description | ii, 41 p. : charts |
| Numéro de catalogue |
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| Descripteurs | Monetary policy Inflation Labour market |
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