Equilibrium Unemployment, Job Flows, and Inflation Dynamics

Antonella Trigari ()

Journal of Money, Credit and Banking, 2009, vol. 41, issue 1, 1-33

Abstract: In order to explain the joint fluctuations of output, inflation and the labor market, this paper develops and estimates a general equilibrium model that integrates a theory of equilibrium unemployment into a monetary model with nominal price rigidities. The estimated model accounts for the responses of employment, hours per worker, job creation, and job destruction to a monetary policy shock. Moreover, search frictions in the labor market generate a lower elasticity of marginal costs with respect to output. This helps to explain the sluggishness of inflation and the persistence of output that are observed in the data.

Date: 2009
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https://doi.org/10.1111/j.1538-4616.2008.00185.x

Related works:
Journal Article: Equilibrium Unemployment, Job Flows, and Inflation Dynamics (2009)
Working Paper: Equilibrium unemployment, job flows and inflation dynamics (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:wly:jmoncb:v:41:y:2009:i:1:p:1-33

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