Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/203056
Authors: 
Coronese, Matteo
Salle, Isabelle
Year of Publication: 
2018
Series/Report no.: 
LEM Working Paper Series 2018/03
Abstract: 
We integrate a centralized wage bargaining process into an otherwise standard DSGE model with a financial accelerator to simulate distributional shocks in the presence of financial instability. Our framework provides a counterfactual analysis of the effects of the observed decrease in the labor share when no concomitant rise in households' credit offsets the adverse effect on consumption. The result is a prolonged under-consumption recession that outweighs the initial boost in investment.
Subjects: 
Income inequality
Distributional shocks
Under-consumption
JEL: 
E70
C63
E03
E52
Document Type: 
Working Paper

Files in This Item:
File
Size
376.08 kB





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