Stock market conditions and monetary policy in an DSGE model for the US

Efrem Castelnuovo and Salvatore Nisticò

No 11/2010, Bank of Finland Research Discussion Papers from Bank of Finland

Abstract: We improve the precision of the test of the implicit contract model that Beaudry and DiNardo proposed twenty years ago. Our data set allows us to define the precise industry and plant of a particular employment relationship, link local labour market characteristics and company characteristics to the individual level of wages, and control for composition effects. We find evidence in favour of the spot market model of wage setting in the whole sample, but there is significant variation across industries and educational levels. In particular, the spot market matters most for low-skill workers, while the implicit contract model with one-sided limited commitment applies better to high-skill workers.

Date: 2010
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Citations: View citations in EconPapers (11)

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Related works:
Journal Article: Stock market conditions and monetary policy in a DSGE model for the U.S (2010)
Working Paper: Stock market conditions and monetary policy in a DSGE model for the U.S (2010)
Working Paper: Stock Market Conditions and Monetary Policy in a DSGE Model for the U.S (2010)
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