Notes for a new guide to Keynes (I): Wages, aggregate demand, and employment

Jordi Galí

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: I revisit the General Theory's discussion of the role of wages in employment determination through the lens of the New Keynesian model. The analysis points to the key role played by the monetary policy rule in shaping the link between wages and employment, and in determining the welfare impact of enhanced wage flexibility. I show that the latter is not always welfare improving.

Keywords: wage flexibility; monetary policy rules; employment stability. (search for similar items in EconPapers)
JEL-codes: E32 (search for similar items in EconPapers)
Date: 2012-09, Revised 2012-12
New Economics Papers: this item is included in nep-hpe, nep-lab and nep-mac
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Related works:
Working Paper: Notes for a New Guide to Keynes (I): Wages, Aggregate Demand, and Employment (2015)
Journal Article: NOTES FOR A NEW GUIDE TO KEYNES (I): WAGES, AGGREGATE DEMAND, AND EMPLOYMENT (2013)
Working Paper: Notes for a New Guide to Keynes (I): Wages, Aggregate Demand, and Employment (2013)
Working Paper: Notes for a New Guide to Keynes (I): Wages, Aggregate Demand, and Employment (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:1339

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