Downward Nominal Wage Rigidities Bend the Phillips Curve

  title={Downward Nominal Wage Rigidities Bend the Phillips Curve},
  author={Mary C. Daly},
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 or the Board of Governors of the Federal Reserve System. We show that the existence of downward nominal wage rigidities bends the short-run wage Phillips curve. We introduce a model of monetary policy with downward nominal wage rigidities and show that both the slope and curvature of the Phillips curve depend on the level of… CONTINUE READING