Title of article :
How muchinflationisnecessarytogreasethewheels
Author/Authors :
Jinill Kim، نويسنده ,
Issue Information :
روزنامه با شماره پیاپی سال 2008
Abstract :
Tobin’spropositionthatinflation‘‘greases’’thewheelsofthelabormarketisstudied
using asimpledynamicstochasticgeneralequilibriummodelwithasymmetricwage
adjustmentcosts.Thesimulatedmethodofmomentsisusedtoestimatethenonlinear
modelbasedonitssecond-orderapproximation.Optimalinflationisdeterminedbya
benevolent governmentthatmaximizesthehouseholds’welfare.Econometricresults
indicatethatnominalwagesaredownwardlyrigidandthattheoptimallevelofgrease
inflationfortheU.S.economyisabout0.35%peryear,witha95%confidenceinterval
ranging from0.04%to0.87%.
Keywords :
Optimal inflationAsymmetric adjustmentcostsDownwardwagerigidityNonlinear dynamics
Journal title :
Journal of Monetary Economics
Journal title :
Journal of Monetary Economics
