Title: Wage Setting in a Dispersed Information DSGE
Abstract: I develop a general equilibrium model in which economically realistic business cycle responses to shocks result from information dispersion as opposed to multi-period price rigidities as in Calvo (1983). I introduce a labor market with wage-setting workers and a coherent denition of unemployment in a model with dispersed information. The model features persistent monetary policy non-neutrality, despite prices being set every period. Moreover, the model can explain the price puzzle and also generates a negative relationship between wage ination
Publication Year: 2011
Publication Date: 2011-01-01
Language: en
Type: article
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Cited By Count: 1
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