THE BUSINESS-CYCLE WITH NOMINAL CONTRACTS

被引:44
作者
CHO, JO
COOLEY, TF
机构
[1] UNIV ROCHESTER,SIMON SCH BUSINESS,ROCHESTER,NY 14627
[2] UNIV ROCHESTER,DEPT ECON,ROCHESTER,NY 14627
关键词
D O I
10.1007/BF01213939
中图分类号
F [经济];
学科分类号
02 ;
摘要
In this paper we study the quantitative implications of nominal wage contracts for business cycle fluctuations. We address this issue using a model economy based on the neoclassical growth model supplemented by the assumption that cash is needed to purchase goods. We consider a variation of the standard recursive competitive equilibrium concept that is intended to capture the important features of wage contracting. We use this equilibrium construct to address three issues. First, we consider whether monetary shocks, propagated by nominal contracts, constitute a viable alternative to technology shocks as a source of aggregate fluctuations. Our results suggest that, while monetary shocks and nominal rigidities succeed in causing output volatility of the required magnitude, the resulting data have properties that are inconsistent with several key features of U.S. data. Second, we consider how the behavior of the economy varies with contract length. We find that the volatility induced by both monetary and technology shocks increases sharply with contract length. Finally we consider how much rigidity would be necessary to match the volatility of U.S. output. We find that only a very small amount of rigidity would be necessary to cause output volatility of the magnitude observed.
引用
收藏
页码:13 / 33
页数:21
相关论文
共 37 条
[1]  
AIYAGARI RS, 1994, CONTRIBUTION TECHNOL
[2]  
AKERLOF GA, 1985, Q J ECON, V100, P823
[3]   ON INTERTEMPORAL SUBSTITUTION AND AGGREGATE LABOR SUPPLY [J].
ALOGOSKOUFIS, GS .
JOURNAL OF POLITICAL ECONOMY, 1987, 95 (05) :938-960
[4]  
BARRO RJ, 1971, AM ECON REV, V61, P82
[5]   UNANTICIPATED MONEY, OUTPUT, AND PRICE-LEVEL IN UNITED-STATES [J].
BARRO, RJ .
JOURNAL OF POLITICAL ECONOMY, 1978, 86 (04) :549-580
[6]  
Barro RobertJ., 1976, MONEY EMPLOYMENT INF
[7]  
BILS M, J MONET EC
[8]  
BILS M, 1991, STRUCTURAL CHANGE US
[9]   AGGREGATION AND STABILIZATION POLICY IN A MULTI-CONTRACT ECONOMY [J].
BLINDER, AS ;
MANKIW, NG .
JOURNAL OF MONETARY ECONOMICS, 1984, 13 (01) :67-86
[10]  
CARLTON DW, 1986, AM ECON REV, V76, P637