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Replication data for: The Inflation-Output Trade-Off with Downward Wage Rigidities

Resource Type
  • Benigno, Pierpaolo
  • Ricci, Luca Antonio
Publication Date
  • Abstract

    The macroeconomic implications of downward nominal wage rigidities are analyzed via a dynamic stochastic general equilibrium model featuring aggregate and idiosyncratic shocks. A closed-form solution for a long-run Phillips curve relates average output gap to average wage inflation: it is virtually vertical at high inflation and flattens at low inflation. Macroeconomic volatility shifts the curve outwards and reduces output. The results imply that stabilization policies play an important role, and that optimal inflation may be positive and differ across countries with different macroeconomic volatility. Results are robust to relaxing the wage constraint, for example, when large idiosyncratic shocks arise. (JEL E23, E24, E31, E63)
  • Is supplement to
    DOI: 10.1257/aer.101.4.1436 (Text)
  • Benigno, Pierpaolo, and Luca Antonio Ricci. “The Inflation-Output Trade-Off with Downward Wage Rigidities.” American Economic Review 101, no. 4 (June 2011): 1436–66.
    • ID: 10.1257/aer.101.4.1436 (DOI)

Update Metadata: 2020-05-18 | Issue Number: 2 | Registration Date: 2019-10-11

Benigno, Pierpaolo; Ricci, Luca Antonio (2011): Replication data for: The Inflation-Output Trade-Off with Downward Wage Rigidities. Version: V0. ICPSR - Interuniversity Consortium for Political and Social Research. Dataset.