Horvath, Michal orcid.org/0000-0002-4902-6637 and Belgibayeva, Adiya (2019) Real Rigidities and Optimal Stabilization at the Zero Lower Bound in New Keynesian Economies. Macroeconomic Dynamics. pp. 1371-1400. ISSN 1365-1005
Abstract
The paper revisits the literature on real rigidities in New Keynesian models in the context of an economy at the zero lower bound. It identifies strategic interaction among price- and wage-setting agents in the economy as an important determinant of both optimal policy and economic dynamics in deep recessions. In particular, labor market segmentation is shown to have a significant influence on the length of the forward commitment to keep interest rates at zero, the magnitude of the fiscal policy responses as well as inflation volatility in the economy under optimal policy.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Keywords: | Government Spending,Income Tax,Inflation,Labor Market,Strategic Complementarity,Zero Lower Bound |
Dates: |
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Institution: | The University of York |
Academic Units: | The University of York > Faculty of Social Sciences (York) > Economics and Related Studies (York) |
Depositing User: | Pure (York) |
Date Deposited: | 14 Mar 2017 11:00 |
Last Modified: | 20 Mar 2025 00:07 |
Published Version: | https://doi.org/10.1017/S1365100517000268 |
Status: | Published |
Refereed: | Yes |
Identification Number: | 10.1017/S1365100517000268 |
Related URLs: | |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:113558 |
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