Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/130554
Authors: 
Lechthaler, Wolfgang
Snower, Dennis J.
Year of Publication: 
2011
Series/Report no.: 
Kiel Working Paper 1453 [rev.]
Abstract: 
We build quadratic labor adjustment costs into an otherwise standard New-Keynesian model of the business cycle and show that this increases output persistence in a similar vein as other models of labor market frictions. Furthermore, it is demonstrated that quadratic labor adjustment costs imply a trade off between stabilizing output and stabilizing inflation.
Subjects: 
Monetary Persistence
Labor Adjustment Costs
Optimal Monetary Policy
JEL: 
E24
E32
E52
J23
Document Type: 
Working Paper

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