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    <title>EconStor Collection: Economics Working Papers, Department of Economics, CAU Kiel</title>
    <link>http://hdl.handle.net/10419/84</link>
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      <title>Envy, guilt, and the Phillips curve</title>
      <link>http://hdl.handle.net/10419/54987</link>
      <description>Titel: Envy, guilt, and the Phillips curve
&lt;br/&gt;
&lt;br/&gt;Autoren: Ahrens, Steffen; Snower, Dennis J.
&lt;br/&gt;
&lt;br/&gt;Zusammenfassung: We incorporate inequity aversion into an otherwise standard New Keynesian dynamic equilibrium model with Calvo wage contracts and positive inflation. Workers with relatively low incomes experience envy, whereas those with relatively high incomes experience guilt. The former seek to raise their income, and the latter seek to reduce it. The greater the inflation rate, the greater the degree of wage dispersion under Calvo wage contracts, and thus the greater the degree of envy and guilt experienced by the workers. Since the envy effect is stronger than the guilt effect, according to the available empirical evidence, a rise in the inflation rate leads workers to supply more labor over the contract period, generating a significant positive long-run relation between inflation and output (and employment), for low inflation rates. This Phillips curve relation, together with an inefficient zero-inflation steady state, provides a rationale for a positive long-run inflation rate. Given standard calibrations, optimal monetary policy is associated with a long-run inflation rate around 2 percent.</description>
      <pubDate>Sat, 29 Oct 2011 22:58:59 GMT</pubDate>
    </item>
    <item>
      <title>Envy, guilt, and the Phillips curve</title>
      <link>http://hdl.handle.net/10419/54987</link>
      <description>Titel: Envy, guilt, and the Phillips curve
&lt;br/&gt;
&lt;br/&gt;Autoren: Ahrens, Steffen; Snower, Dennis J.
&lt;br/&gt;
&lt;br/&gt;Zusammenfassung: We incorporate inequity aversion into an otherwise standard New Keynesian dynamic equilibrium model with Calvo wage contracts and positive inflation. Workers with relatively low incomes experience envy, whereas those with relatively high incomes experience guilt. The former seek to raise their income, and the latter seek to reduce it. The greater the inflation rate, the greater the degree of wage dispersion under Calvo wage contracts, and thus the greater the degree of envy and guilt experienced by the workers. Since the envy effect is stronger than the guilt effect, according to the available empirical evidence, a rise in the inflation rate leads workers to supply more labor over the contract period, generating a significant positive long-run relation between inflation and output (and employment), for low inflation rates. This Phillips curve relation, together with an inefficient zero-inflation steady state, provides a rationale for a positive long-run inflation rate. Given standard calibrations, optimal monetary policy is associated with a long-run inflation rate around 2 percent.</description>
      <pubDate>Sat, 29 Oct 2011 22:58:59 GMT</pubDate>
    </item>
    <item>
      <title>Efficient high-dimensional importance sampling in mixture frameworks</title>
      <link>http://hdl.handle.net/10419/53125</link>
      <description>Titel: Efficient high-dimensional importance sampling in mixture frameworks
&lt;br/&gt;
&lt;br/&gt;Autoren: Kleppe, Tore Selland; Liesenfeld, Roman
&lt;br/&gt;
&lt;br/&gt;Zusammenfassung: This paper provides high-dimensional and flexible importance sampling procedures for the likelihood evaluation of dynamic latent variable models involving finite or infinite mixtures leading to possibly heavy tailed and/or multi-modal target densities. Our approach is based upon the efficient importance sampling (EIS) approach of Richard and Zhang (2007) and exploits the mixture structure of the model when constructing importance sampling distributions as mixture of distributions. The proposed mixture EIS procedures are illustrated with ML estimation of a student-t state space model for realized volatilities and a stochastic volatility model with leverage effects and jumps for asset returns.</description>
      <pubDate>Fri, 29 Oct 2010 22:58:59 GMT</pubDate>
    </item>
    <item>
      <title>Moment matching versus Bayesian estimation: Backward-looking behaviour in the new-Keynesian three-equations model</title>
      <link>http://hdl.handle.net/10419/50555</link>
      <description>Titel: Moment matching versus Bayesian estimation: Backward-looking behaviour in the new-Keynesian three-equations model
&lt;br/&gt;
&lt;br/&gt;Autoren: Franke, Reiner; Jang, Tae-Seok; Sacht, Stephen
&lt;br/&gt;
&lt;br/&gt;Zusammenfassung: The paper considers an elementary New-Keynesian three-equations model and contrasts its Bayesian estimation with the results from the method of moments (MM), which seeks to match the model-generated second moments of inflation, output and the interest rate to their empirical counterparts. Special emphasis is placed on the degree of backward-looking behaviour in the Phillips curve. While, in line with much of the literature, it only plays a marginal role in the Bayesian estimations, MM yields values of the price indexation parameter close to or even at its maximal value of one. These results are worth noticing since the matching thus achieved is entirely satisfactory. The matching of some special (and even better) versions of the model is econometrically evaluated by a model comparison test.</description>
      <pubDate>Fri, 29 Oct 2010 22:58:59 GMT</pubDate>
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