Title of article
Ramseymonetarypolicywithlabormarketfrictions$
Author/Authors
EsterFaia، نويسنده ,
Issue Information
روزنامه با شماره پیاپی سال 2008
Pages
12
From page
570
To page
581
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
Serial Year
2008
Journal title
Journal of Monetary Economics
Record number
846313
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