wage rigidity

The second point about wage rigidities receives enormous emphasis in the so- called literature.

This suggests a link with differing wage rigidities across the euro area.

That is, do nominal wage rigidities result in lower output and higher unemployment at the level of an industry, region, or economy?

In each model the paper finds that there is significant evidence of downward nominal wage rigidity over the period studied.

It is often asserted that existing wage rigidities are reinforced by strict regulations on working hours.

We have made less progress, however, in analysing the implications for market behaviour of wage rigidity at the level of the individual worker.

The slow price adjustments in the euro area stem from wage rigidities and imperfect competition.

Thus, only a small fraction of the spike is attributed to asymmetric downward wage rigidity.

Changes in labour market institutions can therefore be expected to alter the degree of downward wage rigidity in the economy.

Extending the model to include nominal wage rigidity is straightforward, but leads to a more complicated system of equations.

But he described the risk as “very, very meagre,” given European price and wage rigidities in continental Europe’s economies.

(2007) show that even with Taylor contracts, nominal wage rigidity can have quantitatively important effects on economic welfare.

The importance of downward wage rigidity is likely to depend on a country’s institutional arrangements for wage determination.

Robert Barro took the bargaining view in his argument against Keynesian interpretations of wage rigidities.

It provides an alternative to the predominant New Keynesian view, in which price and wage rigidities are the primary frictions.

The first premise, downward wage rigidity, implies that full employment cannot automatically be restored following a shortfall in aggregate demand.

The estimates reveal that either price or wage rigidities are key nominal frictions that generate real monetary effects.

Behavioral economic research backs the view that inflation is costly, even though "very modest" inflation might help protect against downward wage rigidity, she said.

This property is attributed to a feature of the model, namely the absence of real imperfections such as real wage rigidities.

"Nominal Wage Rigidity in the United Kingdom."

Real Wage Rigidities and the New Keynesian Model"."

If these institutional features involve permanent mismatches in the labor market or real wage rigidities, the natural rate of unemployment may feature involuntary unemployment.

Nominal wage rigidities act as sand in the works, dampening the response of real exchange rates under fixed exchange rates.

In a model with nominal wage rigidities,changes in exchange rate implies changes in actual real wage.

But according to the first study of downward nominal wage rigidity' to use pay data for individual workers, in practice, the UK labour market is remarkably flexible.