Staggered wages, sticky prices, and labor market dynamics in matching models

Janett Neugebauer and Dennis Wesselbaum

No 1608, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: This paper investigates the role of staggered wages and sticky prices in explaining stylized labor market facts. We build on a partial equilibrium search and matching model and expand the model to a general equilibrium model with sticky prices and/or staggered wages. We show that the core model creates too much volatility in response to a technology shock. The sticky price model outperforms the staggered wage model in terms of matching volatilities, while the combination of both rigidities matches the data reasonably well.

Keywords: Search and Matching; Staggered Wages; Sticky Prices (search for similar items in EconPapers)
JEL-codes: E24 E32 J64 (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Staggered Wages, Sticky Prices, and Labor Market Dynamics in Matching Models (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:1608

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