Kiel Working Papers, Kiel Institute for World Economics
No 1674:
Evaluating the performance of the search and matching model with sticky wages
Christopher Reicher
Abstract: Several authors have proposed staggered wage bargaining as
a way to introduce sticky wages into search and matching models while
preserving individual rationality. I evaluate the quantitative implications
of such an approach. I feed through a series of estimated shocks from US
data into a search and matching model with sticky prices and wages. I
compare the implications of how the sticky wages enter into the hiring
decision, and there seems to be a tradeoff between generating business
cycle volatility and matching the lack of a long-run relationship between
vacancy creation and inflation. With regard to wages, the sticky wage model
unconditionally does a better job at matching wages than the flexible wage
model
Keywords: wages, sticky prices, staggered Nash bargaining, inflation, new hires, search and matching, business cycles; (follow links to similar papers)
JEL-Codes: E24,; E25,; E32,; J23,; J31,; J63; (follow links to similar papers)
39 pages, December 2010
Before downloading any of the electronic versions below
you should read our statement on
copyright.
Download GhostScript
for viewing Postscript files and the
Acrobat Reader for viewing and printing pdf files.
Downloadable files:
kap-1674.pdf 
Download Statistics
Report other problems with accessing this service to Sune Karlsson ()
or Helena Lundin ().
Programing by
Design Joakim Ekebom
