The New Keynesian Wage Phillips Curve: Calvo vs. Rotemberg

Benjamin Born and Johannes Pfeifer

No 11568, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We systematically evaluate how to translate a Calvo wage duration into an implied Rotemberg wage adjustment cost parameter in medium-scale New Keynesian DSGE models by making use of the well-known equivalence of the two setups at first order. We consider a wide range of felicity functions and show that the assumed household insurance scheme and the presence of labor taxation greatly matter for this mapping, giving rise to differences of up to one order of magnitude. Our results account for the inclusion of wage indexing, habit formation in consumption, and the presence of fixed costs in production.

Keywords: Wage phillips curve; Wage stickiness; Rotemberg; Calvo (search for similar items in EconPapers)
JEL-codes: E10 E30 (search for similar items in EconPapers)
Date: 2016-10
New Economics Papers: this item is included in nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
https://cepr.org/publications/DP11568 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: THE NEW KEYNESIAN WAGE PHILLIPS CURVE: CALVO VS. ROTEMBERG (2020)
Working Paper: The New Keynesian Wage Phillips Curve: Calvo vs. Rotemberg (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:11568

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP11568

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().