Persistence and nominal inertia in a Generalized Taylor Economy: how longer contracts dominate shorter contracts

Dixon, Huw ORCID: https://orcid.org/0000-0002-9875-8965 and Kara, Engin 2007. Persistence and nominal inertia in a Generalized Taylor Economy: how longer contracts dominate shorter contracts. [Working Paper]. Cardiff Economics Working Papers, Cardiff: Cardiff University.

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Abstract

We develop the Generalized Taylor Economy (GTE) in which there are many sectors with overlapping contracts of different lengths. In economies with the same average contract length, monetary shocks will be more persistent when longer contracts are present. Using the Bils-Klenow distribution of contract lengths, we find that the corresponding GTE tracks the US data well. When we choose a GTE with the same distribution of completed contract lengths as the Calvo, the economies behave in a similar manner.

Item Type:	Monograph (Working Paper)
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Subjects:	H Social Sciences > HB Economic Theory
Publisher:	Cardiff University
Date of First Compliant Deposit:	30 March 2016
Last Modified:	28 Oct 2022 10:17
URI:	https://orca.cardiff.ac.uk/id/eprint/77742

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