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Staggered price-setting and staggered wage-setting are commonly viewed as similar mechanisms in generating persistent real effects of monetary shocks. In this paper, we distinguish the two mechanisms in a dynamic stochastic general equilibrium framework. We show that, although the dynamic price-setting and wage-setting equations are alike, a key parameter(More)
and CIRPÉE This paper revisits an important issue concerning the persistent real effect of a shock to monetary policy. Although recent sentiment has shifted away from price stickiness toward wage stickiness in explaining persistence, the present paper shows that introducing an input–output structure tends to make the former an equally important monetary(More)
  • Susanto Basu, Larry Christiano, +22 authors Tao Zha
  • 2011
acknowledges the financial support from the Hong Kong Research Grant Council (project #643908). The views expressed herein are the authors' and not necessarily those of the Federal Reserve Banks of Atlanta and San Francisco or the Federal Reserve System. Any remaining errors are the authors' responsibility. Federal Reserve Bank of Atlanta working papers,(More)
and the Econometric Society 1999 Winter Meeting. We thank the seminar participants for comments. We are especially grateful to the Research Department at the Federal Reserve Bank of Minneapolis for providing excellent research support when we were visiting there. The usual disclaimer applies. Abstract: Staggered price and staggered wage contracts are(More)
pants at the BC/BU Macroeconomics seminar for helpful comments. The usual disclaimer applies. Phaneuf acknowledges financial support from SSHRC and FCAR. Abstract: This paper investigates the contributions of staggered price contracts, staggered wage contracts, and an input-output production structure in generating the observed persistence of real output(More)
Winter Meeting for helpful comments. Phaneuf acknowledges financial support from SSHRC and FCAR and the research assistance of Mohamed Gammoudi. The views expressed in the paper are those of the authors and do not necessarily represent the views of the Federal Reserve Bank of Kansas City or the Federal Reserve System. Abstract This paper seeks to understand(More)
This paper presents preliminary findings and is being distributed to economists and other interested readers solely to stimulate discussion and elicit comments. The views expressed in this paper are those of the authors and are not necessarily reflective of views at the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions(More)
Wage inequality between education groups in the United States has increased substantially since the early 1980s. The relative number of college-educated workers has also increased dramatically in the postwar period. This paper presents a unified framework where the dynamics of both skill accumulation and wage inequality arise as an equilibrium outcome(More)
The views in this paper are solely the responsibility of the authors and should not be interpreted as reflecting the views of the Federal Reserve Bank of San Francisco, the Federal Reserve Bank of Atlanta, or the Board of Governors of the Federal Reserve System. Abstract. This paper studies the empirical relevance of temptation and self-control using(More)