Employment, hours and optimal monetary policy
"We characterize optimal monetary policy in a New Keynesian search-and-matching model where multiple-worker firms satisfy demand in the short run by adjusting hours per worker. Imperfect product market competition and search frictions reduce steady state hours per worker below the efficient lev...
| Main Authors: | , , |
|---|---|
| Institution: | ETUI-European Trade Union Institute |
| Format: | TEXT |
| Language: | English |
| Published: |
Frankfurt am Main
2014
ECB |
| Subjects: | |
| Online Access: | https://www.labourline.org/KENTIKA-19117882124919350649-employment,-hours-and-optimal-.htm |
| _version_ | 1771659893712879619 |
|---|---|
| author | Dossche, Maarten Lewis, Vivien Poilly, Céline |
| author_facet | Dossche, Maarten Lewis, Vivien Poilly, Céline |
| collection | Library items |
| description | "We characterize optimal monetary policy in a New Keynesian search-and-matching model where multiple-worker firms satisfy demand in the short run by adjusting hours per worker. Imperfect product market competition and search frictions reduce steady state hours per worker below the efficient level. Bargaining results in a convex ‘wage curve’ linking wages to hours. Since the steady-state real marginal wage is low, wages respond little to hours. As a result, firms overuse the hours margin at the expense of hiring, which makes hours too volatile. The Ramsey planner uses inflation as an instrument to dampen inefficient hours fluctuations." |
| format | TEXT |
| geographic | EU countries |
| id | 19117882124919350649_22fb50591ac7450abec96c31232cd3e9 |
| institution | ETUI-European Trade Union Institute |
| is_hierarchy_id | 19117882124919350649_22fb50591ac7450abec96c31232cd3e9 |
| is_hierarchy_title | Employment, hours and optimal monetary policy |
| language | English |
| physical | 65 p. Digital |
| publishDate | 2014 |
| publisher | Frankfurt am Main ECB |
| spellingShingle | Dossche, Maarten Lewis, Vivien Poilly, Céline employment monetary policy wages working time Employment, hours and optimal monetary policy |
| thumbnail | https://www.labourline.org/Image_prev.jpg?Archive=109133592731 |
| title | Employment, hours and optimal monetary policy |
| topic | employment monetary policy wages working time |
| url | https://www.labourline.org/KENTIKA-19117882124919350649-employment,-hours-and-optimal-.htm |