Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/45871
Authors: 
Reicher, Christopher Phillip
Year of Publication: 
2010
Series/Report no.: 
Kiel Working Papers 1674
Abstract: 
Several authors have proposed staggered wage bargaining as a way to introduce sticky wages into search and matching models while preserving individual rationality. I evaluate the quantitative implications of such an approach. I feed through a series of estimated shocks from US data into a search and matching model with sticky prices and wages. I compare the implications of how the sticky wages enter into the hiring decision, and there seems to be a tradeoff between generating business cycle volatility and matching the lack of a long-run relationship between vacancy creation and inflation. With regard to wages, the sticky wage model unconditionally does a better job at matching wages than the flexible wage model.
Subjects: 
Sticky wages
sticky prices
staggered Nash bargaining
inflation
new hires
search and matching
business cycles
JEL: 
E24
E25
E32
J23
J31
J63
Document Type: 
Working Paper

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