Pecuniary externalities in economies with downward wage rigidity

• 成果类型: Article
• 署名作者: Wolf, Martin
• 署名单位: University of Vienna
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2019.10.006
• 发表日期: 2020
• 页码: 219-235
• 关键词: Macroprudential policy; unemployment; monopsony; Pecuniary externality; Downward nominal wage rigidity

摘要

A pecuniary externality in economies with downward nominal wage rigidity leads firms to hire too many workers in expansions, which leads to too much unemployment in recessions. When firms hire more workers, firms fail to internalize that competition for workers between firms pushes up the aggregate wage, which imposes a negative externality over other firms. The externality can be resolved by a macroprudential tax on labor in expansions. In the calibrated model, the tax reduces the welfare cost of downward nominal wage rigidity by up to 90%, as it makes the economy significantly less exposed to unemployment crises. (C) 2019 Elsevier B.V. All rights reserved.