Rodrigues Madeira, Joao Antonio orcid.org/0000-0002-7380-9009 (2014) Overtime Labor, Employment Frictions, and the New Keynesian Phillips Curve. Review of economics and statistics. pp. 767-778. ISSN 0034-6535
Abstract
This paper presents a New Keynesian (NK) model that is extended to differentiate between straight time and overtime work. The model proposes that the New Keynesian Phillips curve (NKPC) should be estimated with marginal cost measured in terms of overtime labor; the resulting coefficient estimates are in accordance with theory and statistically significant for the hybrid NKPC (which allows for backward-looking price setters) but not for the purely forward-looking NKPC. In the hybrid model, backward-looking behavior is found to be predominant. The paper also shows that the incorporation of employment frictions (predetermined employment and convex adjustment costs) in NK models helps reconcile the frequent price changes found in the microdata with the degree of sluggishness in inflation adjustment to output changes at the macro level.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2014 The President and Fellows of Harvard College and the Massachusetts Institute of Technology. This is an author produced version of a paper published in The Review of Economics and Statistics. Uploaded in accordance with the publisher's self-archiving policy. |
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: | 17 Sep 2015 12:57 |
Last Modified: | 16 Oct 2024 12:29 |
Published Version: | https://doi.org/10.1162/REST_a_00457 |
Status: | Published |
Refereed: | Yes |
Identification Number: | 10.1162/REST_a_00457 |
Related URLs: | |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:90013 |