Incorporating labour market frictions into an optimising-based monetary policy model

Stéphane Moyen and Jean-Guillaume Sahuc

Post-Print from HAL

Abstract: This paper examines the effects of introducing a non-Walrasian labour market into the "New Neoclassical Synthesis" framework. A dynamic stochastic general equilibrium model is formulated, solved and calibrated in order to evaluate its ability to replicate the main features of the Euro area economy. This framework allows us to study the effects of labour market rigidities, nominal rigidities and other frictions to give account of the impact of monetary policy, technology and public spending shocks. Our simulations show that: (i) real rigidities do not act as a substitute for nominal rigidities but as a necessary complement; (ii) the Beveridge and Phillips relations are reproduced; (iii) hours worked are too sensitive an adjustment variable; and (iv) the real wage dynamics is still procyclical. © 2004 Elsevier B.V. All rights reserved.

Keywords: DSGE models; Endogenous persistence; Euro area; Labour market search; Nominal rigidities; Real rigidities (search for similar items in EconPapers)
Date: 2005-01
References: Add references at CitEc
Citations: View citations in EconPapers (39)

Published in Economic Modelling, 2005, 22 (1), pp.159--186. ⟨10.1016/j.econmod.2004.06.001⟩

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

Related works:
Journal Article: Incorporating labour market frictions into an optimising-based monetary policy model (2005)
Working Paper: Incorporating Labour Market Frictions into an Optimising-Based Monetary Policy Model (2005)
Working Paper: Incorporating Labour Market Frictions into an Optimising-Based Monetary Policy Model (2004)
Working Paper: Incorporating Labour Market Frictions into an Optimizing Based Monetary Policy Model (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02877999

DOI: 10.1016/j.econmod.2004.06.001

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD (hal@ccsd.cnrs.fr).