Title of article
Labor marketreformandpricestability:Anapplicationtothe EuroArea
Author/Authors
CarlosThomas، نويسنده ,
Issue Information
روزنامه با شماره پیاپی سال 2008
Pages
15
From page
885
To page
899
Abstract
Centralbankersfrequentlysuggestthatlabormarketreformmaybebeneficialfor
inflationmanagement.Thispaperinvestigatesthistopicbysimulatingtheeffectsof
reductions infiringcostsandunemploymentbenefitsoninflationvolatilityintheEuro
Area, usinganestimatedNewKeynesianmodelwithsearchandmatchingfrictions.
Qualitatively,changesinlabormarketpoliciesalterthevolatilityofinflationinresponse
to shocks,byaffectingthevolatilityofthethreecomponentsofrealmarginalcosts
(hiringcosts,firingcostsandwagecosts).Quantitatively,wefind,however,thatneither
policy islikelytohaveanimportanteffectoninflationvolatility,duetothesmall
contributionofhiringandfiringcoststoinflationdynamics
Keywords
Labor marketpoliciesSearch andmatchingfrictionsNewKeynesianmodel
Journal title
Journal of Monetary Economics
Serial Year
2008
Journal title
Journal of Monetary Economics
Record number
846339
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