@article{Ascari2009Real,
abstract = {This paper analyzes the cost of disinflations under real wage rigidities in a micro-founded New Keynesian model. The conventional view is that real wage rigidities can be a useful mechanism to generate a slump in output after a credible disinflationary policy because they prevent the immediate adjustment of inflation. This view is flawed, since it depends on analyzing the model in a linearized framework. Once nonlinearities are taken into account, the results change both qualitatively and quantitatively. Disinflations actually lead to a permanently higher level of output, and real wage rigidities increase the output during the adjustment to the new steady state.},
author = {Guido Ascari and Christian Merkl},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
doi = {10.1111/j.1538-4616.2009.00211.x},
isbn = {0022-2879},
journal = {Journal of money, credit and banking : JMCB},
keywords = {E31; E50; 330; disinflation; sticky prices; real wage rigidities; nonlinearities; Reallohn; Lohnrigidit\"{a}t; Arbeitslosigkeit; Geldpolitisches Ziel; Ungleichgewichtstheorie; New-Keynesian Phillips Curve; Theorie},
language = {eng},
number = {2},
pages = {417-435},
title = {Real wage rigidities and the cost of disinflations},
url = {http://hdl.handle.net/10419/28672},
volume = {41},
year = {2009}
}
