Title of article :
Ramseymonetarypolicywithlabormarketfrictions$
Author/Authors :
EsterFaia، نويسنده ,
Issue Information :
روزنامه با شماره پیاپی سال 2008
Abstract :
TraditionalNewKeynesianmodelsprescribethatoptimalmonetarypolicyshouldaim
at pricestability.Intheabsenceofalabormarketfrictions,themonetaryauthorityfaces
no unemployment/inflationtrade-off.Thedesignofoptimalmonetarypolicyis
analyzed hereforaframeworkwithstickypricesandmatchingfrictionsinthelabor
market.Optimalpolicyfeaturesdeviationsfrompricestabilityinresponsetoboth
productivity andgovernmentexpenditureshocks.WhentheHosios[1990.Onthe
efficiencyofmatchingandrelatedmodelsofsearchandunemployment.Reviewof
EconomicStudies57(2),279–298]conditionisnotmet,searchexternalitiesmakethe
flexiblepriceallocationunfeasible.Optimaldeviationsfrompricestabilityincreasewith
workers’ bargainingpower,asfirmsincentivestopostvacanciesfallandunemployment
fluctuatesabovetheParetoefficientone
Keywords :
Optimal monetarypolicyMatching frictionsCongestion externality
Journal title :
Journal of Monetary Economics
Journal title :
Journal of Monetary Economics
