The Responses of Wages and Prices to Technology Shocks

  title={The Responses of Wages and Prices to Technology Shocks},
  author={Marc Edge and Thomas Laubach and John C. Williams},
This paper reexamines wage and price dynamics in response to permanent shocks to productivity. We estimate a micro-founded dynamic general equilibrium (DGE) model of the U.S. economy with sticky wages and sticky prices using impulse responses to technology and monetary policy shocks. We utilize a flexible specification for wageand price-setting that allows for the sluggish adjustment of both the levels of these variables—as in standard contracting models—as well as intrinsic inertia in wage and… CONTINUE READING

From This Paper

Figures, tables, and topics from this paper.


Publications referenced by this paper.
Showing 1-10 of 35 references

Estimation and Control of an Optimization- Based Model with Sticky Prices and Wages.

  • Amato, D Jeffery, Thomas Laubach
  • Journal of Economic Dynamics and Control
  • 2003
2 Excerpts

Imperfect Credibility and Inflation Persistence.

  • Erceg, J Christopher, Andrew T. Levin
  • Journal of Monetary Economics
  • 2003
2 Excerpts

Monetary Policy and the Effects of a Shift in the Growth Rate of Technology.

  • Edge, M Rochelle, Thomas Laubach, John C. Williams
  • 2003
2 Excerpts

The Performance of Forecast-based Policy Rules under Model Uncertainty

  • Levin, T. Andrew, Volker Weiland, John C. Williams
  • American Economic Review 93 (2003), 622-645.
  • 2003

An Estimated Stochastic Dynamic General Equilibrium Model of the Euro Area.

  • Smets, Frank, Raf Wouters
  • European Central Bank Working Paper No
  • 2002

Long-Run Labor Supply and the Elasticity of Intertemporal Substitution for Consumption.

  • Basu, Susanto, Miles S. Kimball
  • 2002
1 Excerpt

Similar Papers

Loading similar papers…