Real wage rigidities and the new Keynesian model:
"Most central banks perceive a trade-off between stabilizing inflation and stabilizing the gap between output and desired output. However, the standard new Keynesian framework implies no such trade-off. In that framework, stabilizing inflation is equivalent to stabilizing the welfare-relevant o...
Gespeichert in:
| Hauptverfasser: | , |
|---|---|
| Format: | Buch |
| Sprache: | English |
| Veröffentlicht: |
Cambridge, Mass.
National Bureau of Economic Research
2005
|
| Schriftenreihe: | National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series
11806 |
| Schlagworte: | |
| Online-Zugang: | kostenfrei |
| Zusammenfassung: | "Most central banks perceive a trade-off between stabilizing inflation and stabilizing the gap between output and desired output. However, the standard new Keynesian framework implies no such trade-off. In that framework, stabilizing inflation is equivalent to stabilizing the welfare-relevant output gap. In this paper, we argue that this property of the new Keynesian framework, which we call the "divine coincidence", is due to a special feature of the model: the absence of non trivial real imperfections. We focus on one such real imperfection, namely, real wage rigidities. When the baseline new Keynesian model is extended to allow for real wage rigidities, the divine coincidence disappears, and central banks indeed face a trade-off between stabilizing inflation and stabilizing the welfare-relevant output gap. We show that not only does the extended model have more realistic normative implications, but it also has appealing positive properties. In particular, it provides a natural interpretation for the dynamic inflation--unemployment relation found in the data"--National Bureau of Economic Research web site. |
| Beschreibung: | 36 S. |
Internformat
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Datensatz im Suchindex
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| id | DE-604.BV021482176 |
| illustrated | Not Illustrated |
| index_date | 2024-07-02T14:04:54Z |
| indexdate | 2024-07-09T20:36:09Z |
| institution | BVB |
| language | English |
| oai_aleph_id | oai:aleph.bib-bvb.de:BVB01-014664559 |
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| physical | 36 S. |
| publishDate | 2005 |
| publishDateSearch | 2005 |
| publishDateSort | 2005 |
| publisher | National Bureau of Economic Research |
| record_format | marc |
| series | National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series |
| series2 | National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series |
| spelling | Blanchard, Olivier 1948- Verfasser (DE-588)115601929 aut Real wage rigidities and the new Keynesian model Olivier Blanchard ; Jordi Galí Cambridge, Mass. National Bureau of Economic Research 2005 36 S. txt rdacontent n rdamedia nc rdacarrier National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series 11806 "Most central banks perceive a trade-off between stabilizing inflation and stabilizing the gap between output and desired output. However, the standard new Keynesian framework implies no such trade-off. In that framework, stabilizing inflation is equivalent to stabilizing the welfare-relevant output gap. In this paper, we argue that this property of the new Keynesian framework, which we call the "divine coincidence", is due to a special feature of the model: the absence of non trivial real imperfections. We focus on one such real imperfection, namely, real wage rigidities. When the baseline new Keynesian model is extended to allow for real wage rigidities, the divine coincidence disappears, and central banks indeed face a trade-off between stabilizing inflation and stabilizing the welfare-relevant output gap. We show that not only does the extended model have more realistic normative implications, but it also has appealing positive properties. In particular, it provides a natural interpretation for the dynamic inflation--unemployment relation found in the data"--National Bureau of Economic Research web site. Keynesian economics Galí, Jordi 1961- Verfasser (DE-588)128379618 aut Erscheint auch als Internetausgabe National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series 11806 (DE-604)BV002801238 11806 http://papers.nber.org/papers/w11806.pdf kostenfrei Volltext |
| spellingShingle | Blanchard, Olivier 1948- Galí, Jordi 1961- Real wage rigidities and the new Keynesian model National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series Keynesian economics |
| title | Real wage rigidities and the new Keynesian model |
| title_auth | Real wage rigidities and the new Keynesian model |
| title_exact_search | Real wage rigidities and the new Keynesian model |
| title_exact_search_txtP | Real wage rigidities and the new Keynesian model |
| title_full | Real wage rigidities and the new Keynesian model Olivier Blanchard ; Jordi Galí |
| title_fullStr | Real wage rigidities and the new Keynesian model Olivier Blanchard ; Jordi Galí |
| title_full_unstemmed | Real wage rigidities and the new Keynesian model Olivier Blanchard ; Jordi Galí |
| title_short | Real wage rigidities and the new Keynesian model |
| title_sort | real wage rigidities and the new keynesian model |
| topic | Keynesian economics |
| topic_facet | Keynesian economics |
| url | http://papers.nber.org/papers/w11806.pdf |
| volume_link | (DE-604)BV002801238 |
| work_keys_str_mv | AT blanchardolivier realwagerigiditiesandthenewkeynesianmodel AT galijordi realwagerigiditiesandthenewkeynesianmodel |