Flattening of the Phillips Curve with State-Dependent Prices and Wages

• 成果类型: Article
• 署名作者: Costain, James; Nakov, Anton; Petit, Borja
• 署名单位: Banco de Espana; European Central Bank; Centre for Economic Policy Research - UK; CUNEF Universidad
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1093/ej/ueab063
• 发表日期: 2022
• 页码: 546-581
• 关键词: optimal monetary-policy; staggered wage; menu costs; trade-off; inflation; DYNAMICS; models; unemployment; rigidities; CHOICE

摘要

We study monetary transmission in a model of state-dependent prices and wages based on 'control costs'. Stickiness arises because precise choice is costly: decision makers tolerate errors both in the timing of adjustments, and in the new level at which the price or wage is set. The model is calibrated to microdata on the size and frequency of price and wage changes. In our simulations, money shocks have less persistent real effects than in the Calvo framework; nonetheless, the model exhibits a substantial degree of non-neutrality, driven mainly by wage rigidity. State-dependent nominal stickiness implies a flatter Phillips curve as trend inflation declines, because price and wage adjustments become less frequent, making short-run inflation less reactive to shocks. Our model can explain almost half of the observed decline in the slope of the Phillips curve since 2000.