Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/22525
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dc.contributor.authorGerke, Rafaelen_US
dc.contributor.authorRubart, Jensen_US
dc.date.accessioned2009-01-29T15:02:14Z-
dc.date.available2009-01-29T15:02:14Z-
dc.date.issued2005en_US
dc.identifier.urihttp://hdl.handle.net/10419/22525-
dc.description.abstractThe question of the main determinants of persistent responses due to nominal shocks captures, at least since Chari et al. (2000), a major part of the recent macroeconomic debate. However, the question whether sticky wages and/or sticky prices are sufficient for persistent reactions of key economic variables remains open. In the present model we allow for nominal rigidities due to Taylor- like wage setting as well as price adjustment costs. However, as our analysis illustrates, smoothing marginal costs seems crucial to derive a contract multiplier, wage staggering alone is not sufficient. Without considering a more specific analysis of factor market frictions, we enforce a point made by Erceg (1997) by analyzing the structure of money demand. In particular, we analyze a ?standard? consumption based money demand function by varying the interest rate elasticity of money demand as well as the steady state rate of money holdings. Our results show that the persistency of the output/price dynamics can be affected crucially by the form of the implicit money demand function. In particular, it is shown that staggered wage contracts have to be accompanied by a sufficiently low interest rate elasticity, otherwise the model fails to reproduce reasonable responses of real variables.
dc.language.isoeng
dc.publisher|aTechnische Universität Darmstadt, Institut für Volkswirtschaftslehre |cDarmstadt
dc.relation.ispartofseries|aDarmstadt Discussion Papers in Economics |x142
dc.subject.jelE41en_US
dc.subject.jelE32en_US
dc.subject.ddc330
dc.subject.keywordMonetary Policy Shocksen_US
dc.subject.keywordSticky Pricesen_US
dc.subject.keywordStaggered Wagesen_US
dc.subject.keywordMoney Demanden_US
dc.subject.stwKonjunkturtheorieen_US
dc.subject.stwLohnrigiditäten_US
dc.subject.stwGeldnachfrageen_US
dc.subject.stwTheorieen_US
dc.titleThe Role of Money Demand in a Business Cycle Model with Staggered Wage Contracts
dc.typeWorking Paper
dc.identifier.ppn481766618en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen
dc.identifier.repecRePEc:zbw:darddp:dar_37210-

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