Optimal Monetary Policy with Staggered Wage and Price Contracts
Citations
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Cites background from "Optimal Monetary Policy with Stagge..."
...In such circumstances, complete price stability may not be a good approximation at all to the optimal policy, as Erceg et al. (1999) show....
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2,716 citations
Cites background or methods from "Optimal Monetary Policy with Stagge..."
...In this paper we present and estimate a dynamic stochastic general equilibrium (DSGE) model for the euro area....
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...Following Kollmann (1997) and Erceg, Henderson, and Levin (2000), we assume that wages can only be optimally adjusted after some random “wage-change signal” is received....
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...Erceg, Henderson, and Levin (2000) use indexation to the average steady-state in ation rate....
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...However, Erceg, Henderson, and Levin (2000) have shown that in this case targeting a weighted average of price in ation and the output gap, de ned as the deviation of actual output from its exible price level, comes close to optimal monetary policy....
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...A closed economy version is analyzed in Erceg, Henderson, and Levin (2000)....
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References
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