Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/128920
Authors: 
Ederer, Stefan
Year of Publication: 
2010
Series/Report no.: 
WIFO Working Papers 360
Abstract: 
The paper modifies a standard NAIRU model by implementing "pricing-to-market" as the basic assumption for the price setting behaviour of firms in an open economy. This entirely changes the outcomes of the model: First, inflation in equilibrium is stable at any rate of unemployment; the long-run Phillips curve is horizontal. Second, income distribution varies with the level of employment. Third, supplemented with a demand equation which allows for effects of both income distribution and international competitiveness, the NAIRU ceases to be a "strong attractor". These characteristics to a certain extent open up the space for expansive wage and demand policies.
Subjects: 
Wages
Inflation
NAIRU
Demand
Distribution
Document Type: 
Working Paper

Files in This Item:
File
Size
388.84 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.