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http://hdl.handle.net/10419/3956
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| Title: | | Real wage rigidities and the cost of disinflations: A comment on Blanchard and Galí  |
| Authors: | | Ascari, Guido Merkl, Christian |
| Issue Date: | | 2007 |
| Citation: | | [Series:] Kiel working paper [Editor:] Institut für Weltwirtschaft, Kiel [No.:] 1312 |
| Series/Report no.: | | Kieler Arbeitspapiere 1312 |
| Abstract: | | This paper analyzes the cost of disinflation under real wage rigidities in a micro-founded New Keynesian model. Unlike Blanchard and Galí (2007) who carried out a similar analysis in a linearized framework, we take non- linearities into account. We show that the results change dramatically, both qualitatively and quantitatively, for the steady states and for the dynamic adjustment paths. In particular, a disinflation implies a prolonged slump without any need for real wage rigidities. |
| Subjects: | | Disinflation Sticky Prices Real Rigidities |
| JEL: | | E52 E31 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Publikationen von Forscherinnen und Forschern des IfW Economists Online Kieler Arbeitspapiere, IfW
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