Nominal and Real Rigidities and the Persistence of Output Fluctuations

L. Phaneuf

Cahiers de recherche from Universite de Montreal, Departement de sciences economiques

Abstract: This Paper Shows That Evidence of a Unit Root in Gnp Can Be Consistent with a Contract-Based Approach to Business Cycles Unlike Previous Attempts on the Persistence of Output Fluctuations in Models with Nominal Rigidities, It Is Shown That a Shift From a Situation of Weak Or Moderate Nominal Wage Rigidity to One of Strong Nominal Wage Rigidity Dramatically Reduces the Amount of Real Wage Rigidity Required to Produce a Near Random Walk Behavior in Gnp. the Two Important Implications Are 1. That the Possibility of a Quasi-Unit Root in U.S. Gnp Due to Contract Staggering Is Considerably More Likely and 2. That the Unit Root Result Can Be Consistent with Many Different Experiences of Countries in Terms of Their Respective Degrees of Nominal and Real Wage Rigidities and of Monetary Accomodation.

Keywords: Int-Outt; Monetary Agreements (search for similar items in EconPapers)
Date: Written 1987

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Persistent link: http://EconPapers.repec.org/RePEc:mtl:montde:8750

Access Statistics for this paper

More papers in Cahiers de recherche from Universite de Montreal, Departement de sciences economiques
Contact information at EDIRC.
Series data maintained by Sharon BREWER ().