Generalized Taylor and Generalized Calvo price and wage-setting: micro evidence with macro implications

Dixon, Huw ORCID: https://orcid.org/0000-0002-9875-8965 and Le Bihan, Herve 2011. Generalized Taylor and Generalized Calvo price and wage-setting: micro evidence with macro implications. [Working Paper]. Cardiff Economics Working Papers, Cardiff: Cardiff University.

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Abstract

The Generalized Calvo and the Generalized Taylor models of price and wage-setting are, unlike the standard Calvo and Taylor counterparts, exactly consistent with the distribution of durations observed in the data. Using price and wage micro-data from a major euro-area economy (France), we develop calibrated versions of these models. We assess the consequences for monetary policy transmission by embedding these calibrated models in a standard DSGE model. The Generalized Taylor model is found to help rationalizing the hump-shaped and persistent response of inflation, without resorting to the counterfactual assumption of systematic wage and price indexation.

Item Type:	Monograph (Working Paper)
Date Type:	Publication
Status:	Published
Schools:	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 10:20
URI:	https://orca.cardiff.ac.uk/id/eprint/77919

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