Policy shocks and wage rigidities : empirical evidence from regional effects of national shocks
Ridder, Maarten de
Pfajfar, Damjan

Fecha: 2017
Resumen: This paper studies the effect of wage rigidities on the transmission of fiscal and monetary policy shocks. We calculate downward wage rigidities across U. S. states using the Current Population Survey. These estimates are used to explain differences in the state level economic effects of identical national shocks in interest rates and taxes. In line with the role of sticky wages in New Keynesian models, we find that contractionary monetary policy and tax shocks increase unemployment and decrease economic activity in rigid states considerably more than in flexible states. We also find larger and more persistent effects of monetary and tax policy shocks for states where the ratio between minimum and median wage is higher and for states that do not have right-to-work legislation.
Resumen: The ADEMU Working Paper Series is being supported by the European Commission Horizon 2020 European Union funding for Research & Innovation, grant agreement No 649396.
Nota: Número d'acord de subvenció EC/H2020/649396
Derechos: Aquest document està subjecte a una llicència d'ús Creative Commons. Es permet la reproducció total o parcial, la distribució, la comunicació pública de l'obra i la creació d'obres derivades, fins i tot amb finalitats comercials, sempre i quan es reconegui l'autoria de l'obra original. Creative Commons
Lengua: Anglès.
Colección: Barcelona Graduate School of Economics: ADEMU working paper series
Colección: ADEMU Working Paper Series ; 68
Documento: workingPaper
Materia: Wage rigidity ; Monetary policy ; Tax multipliers ; U.S. states

Adreça alternativa: https://hdl.handle.net/10230/32775


66 p, 1.6 MB

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Documentos de investigación > Working papers

 Registro creado el 2018-10-23, última modificación el 2018-11-10



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