Optimal monetary policy with staggered wage and price contracts

• 成果类型: Article
• 署名作者: Erceg, CJ; Henderson, DW; Levin, AT
• 署名单位: Federal Reserve System - USA; Federal Reserve System Board of Governors
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/S0304-3932(00)00028-3
• 发表日期: 2000
• 页码: 281-313
• 关键词: Monetary policy; inflation targeting; nominal wage and price rigidity; staggered contracts

摘要

We formulate an optimizing-agent model in which both labor and product markets exhibit monopolistic competition and staggered nominal contracts. The unconditional expectation of average household utility can be expressed in terms of the unconditional variances of the output Sap, price inflation, and wage inflation. Monetary policy cannot achieve the Pareto-optimal equilibrium that would occur under completely flexible wages and prices: that is, the model exhibits a tradeoff in stabilizing the output gap, price inflation, and wage inflation. We characterize the optimal policy rule for reasonable calibrations of the model. We also find that strict price inflation targeting generates relatively large welfare losses, whereas several other simple policy rules perform nearly as well as the optimal rule. (C) 2000 Published by Elsevier Science B.V. All rights reserved. JEL classification: E31; E32; E52.