Replication data for: Understanding the Gains from Wage Flexibility: The Exchange Rate Connection
- Galí, Jordi
- Monacelli, Tommaso
AbstractWe study the gains from increased wage flexibility using a small open economy model with staggered price and wage setting. Two results stand out: (i) the effectiveness of labor cost reductions as a means to stimulate employment is much smaller in a currency union, and (ii) an increase in wage flexibility often reduces welfare, more likely so in an economy that is part of a currency union or with an exchange-rate-focused monetary policy. Our findings call into question the common view that wage flexibility is particularly desirable in a currency union.
Is supplement to
DOI: 10.1257/aer.20131658 (Text)
Galí, Jordi, and Tommaso Monacelli. “Understanding the Gains from Wage Flexibility: The Exchange Rate Connection.” American Economic Review 106, no. 12 (December 2016): 3829–68. https://doi.org/10.1257/aer.20131658.
- ID: 10.1257/aer.20131658 (DOI)
Update Metadata: 2020-05-18 | Issue Number: 2 | Registration Date: 2019-10-12