Economics, Econometrics and Finance
4 years ago

Staggered wage contracts challenge traditional economic theories on inflation and unemployment.

Brazilian Review of Econometrics
Stabilization policy, rational expectations, and staggered real wage contracts
Francisco L. Lopes

Paper Summary

Related papers

Economics, Econometrics and Finance
4 years ago

Staggered wage contracts challenge traditional economic theories on inflation and unemployment.

Macroeconomic Trends
Monetary Models
Macroeconomic Analysis
1 view
Economics, Econometrics and Finance
6 years ago

Euro area faces rising structural unemployment due to recent NAWRU increase.

Labor Dynamics
Employment Health Effects
Macroeconomic Trends
Economics, Econometrics and Finance
8 years ago

Survey expectations impact inflation dynamics, shaping economic forecasts and policies.

Macroeconomic Analysis
Macroeconomic Trends
Monetary Models

The paper shows that expected government policies can affect real output, even under rational expectations. Staggered wage contracts aiming for a specific average wage over time can create a link between inflation and unemployment. If these contracts adjust wages based on economic conditions, they can impact the Phillips Curve relationship between inflation and unemployment. Additionally, when people anticipate changes in monetary policy, it can directly affect inflation, separate from its impact on unemployment.