The B.E. Journal of Macroeconomics
Editor-in-Chief: Abraham, Arpad / Cavalcanti, Tiago
Ed. by Carceles-Poveda , Eva / Debortoli, Davide / Kambourov, Gueorgui / Lambertini, Luisa / Pavoni, Nicola / Ruhl, Kim
2 Issues per year
IMPACT FACTOR increased in 2014: 0.389
5-year IMPACT FACTOR: 0.406
SCImago Journal Rank (SJR) 2014: 0.610
Source Normalized Impact per Paper (SNIP) 2014: 0.518
Impact per Publication (IPP) 2014: 0.419
Volume 14 (2014)
Volume 13 (2013)
Volume 12 (2012)
Volume 11 (2011)
Volume 10 (2010)
Volume 9 (2009)
Volume 8 (2008)
Volume 7 (2007)
Volume 5 (2005)
Volume 4 (2004)
Volume 3 (2003)
Volume 2 (2002)
Most Downloaded Articles
- Comparing Wealth Effects: The Stock Market versus the Housing Market by Case, Karl E./ Quigley, John M. and Shiller, Robert J.
- Monetary and Macroprudential Policy Rules in a Model with House Price Booms by Kannan, Prakash/ Rabanal, Pau and Scott, Alasdair M.
- Who Gets the Credit? And Does It Matter? Household vs. Firm Lending Across Countries by Beck, Thorsten/ Büyükkarabacak, Berrak/ Rioja, Felix K. and Valev, Neven T.
- The Effects of the Great Recession on Central Bank Doctrine and Practice by Bernanke, Ben S.
Monetary Policy under Downward Nominal Wage Rigidity
Citation Information: The B.E. Journal of Macroeconomics. Volume 8, Issue 1, ISSN (Online) 1935-1690, DOI: 10.2202/1935-1690.1809, October 2008
- Published Online:
We develop a New Keynesian model with staggered price and wage setting where downward nominal wage rigidity (DNWR) arises endogenously through the wage bargaining institutions. It is shown that the optimal (discretionary) monetary policy response to changing economic conditions then becomes asymmetric. Interestingly, in our baseline model we find that the welfare loss is actually slightly smaller in an economy with DNWR. This is due to that DNWR is not an additional constraint on the monetary policy problem. Instead, it is a constraint that changes the choice set and opens up for potential welfare gains due to lower wage variability. Another finding is that the Taylor rule provides a fairly good approximation of optimal policy under DNWR. In contrast, this result does not hold in the unconstrained case. In fact, under the Taylor rule, agents would clearly prefer an economy with DNWR before an unconstrained economy ex ante.
Here you can find all Crossref-listed publications in which this article is cited. If you would like to receive automatic email messages as soon as this article is cited in other publications, simply activate the “Citation Alert” on the top of this page.