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

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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