Christian Merkl

Learn More
In the Great Recession most OECD countries used short-time work (publicly subsidized working time reductions) to counteract a steep increase in unemployment. We show that short-time work can actually save jobs. However, there is an important distinction to be made: While the rule-based component of short-time work is a cost-efficient job saver, the(More)
This paper analyzes the cost of disin‡ation under real wage rigidities in a microfounded New Keynesian model. Unlike Blanchard and Galí (2007) who carried out a similar analysis in a linearized framework, we take non-linearities into account. We show that the results change dramatically, both qualitatively and quantitatively, for the steady states and for(More)
Several contributions have recently assessed the size of …scal multipliers both in RBC models and New Keynesian models. None of the studies considers a model with frictional labour markets which is a crucial element, particularly at times in which much of the …scal stimulus has been directed toward labour market measures. We use an open economy model (more(More)
Several contributions have recently assessed the size of fiscal multipliers both in RBC models and New Keynesian models. This paper uses a labor selection model with labor turnover costs and Nash bargained wages to compute fiscal multipliers. The emergence of involuntary unemployment in the model enlarges the scope of the analysis. Shortand long-run(More)
In this paper we propose a novel way to model the labor market in the context of a NewKeynesian general equilibrium model, incorporating labor market frictions in the form of hiring and firing costs. We show that such a model is able to replicate many important stylized facts of the business cycle. The reactions to monetary and real shocks become much more(More)
The Caring Hand that Cripples: The East German Labor Market After Reunification (Detailed Version) The East German labor market has hardly made any progress since German reunification, despite massive migration flows and support from the West. We argue that East Germany is in trouble precisely because of the support it has received. This paper explores the(More)
We study the design of optimal monetary policy in a New Keynesian model with labor turnover costs in which wages are set according to a right to manage bargaining where the …rms’counterpart is given by currently employed workers. Our model captures well the salient features of European labor market, as it leads to sclerotic dynamics of job ‡ows. The(More)