Search with Wage Posting under Sticky Prices

Andrew Foerster and MUSTRE‐DEL‐RíO José
Authors registered in the RePEc Author Service: Jose Mustre-del-Rio

Journal of Money, Credit and Banking, 2022, vol. 54, issue 2-3, 599-626

Abstract: This paper examines the implications of interacting pricing frictions, labor market frictions, and consumption risk by comparing variants of a New Keynesian model. The model variants make alternative assumptions about whether hiring and pricing decisions occur within the same firm or across different firms, and whether workers pool income. Each model implies the same contract is offered to workers, making model comparisons transparent. The economy's response to changes in unemployment benefits or persistently below‐target inflation depends on whether hiring and pricing decisions are integrated. The dynamics following technology or monetary shocks are shaped both by firm‐ and worker‐level assumptions.

Date: 2022
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https://doi.org/10.1111/jmcb.12824

Related works:
Working Paper: Search with wage posting under sticky prices (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:wly:jmoncb:v:54:y:2022:i:2-3:p:599-626

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