Real Wage Rigidities and Disinflation Dynamics: Calvo vs. Rotemberg Pricing

Guido Ascari and Lorenza Rossi

No 116, Quaderni di Dipartimento from University of Pavia, Department of Economics and Quantitative Methods

Abstract: Calvo pricing implies output gains, while Rotemberg pricing implies output losses after a disinflation. Introducing real wage rigidities has opposite effects: it generates a long-lasting boom in output in Calvo, and a moderate output slump in Rotemberg.

Keywords: Disinflation; Sticky Prices; Real Wage Rigidity; Non-linear Simulations (search for similar items in EconPapers)
JEL-codes: E31 E5 (search for similar items in EconPapers)
Pages: 11 pages
Date: 2010-07
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Related works:
Journal Article: Real wage rigidities and disinflation dynamics: Calvo vs. Rotemberg pricing (2011)
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