Generalised Taylor and Generalised Calvo Price and Wage Setting: Micro-evidence with Macro Implications
The Generalised Calvo and the Generalised 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 ca...
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| Format: | Journal Article |
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Wiley-Blackwell
2012
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| Online Access: | http://hdl.handle.net/20.500.11937/55666 |
| _version_ | 1848759678394171392 |
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| author | Dixon, H. Le Bihan, Herve |
| author_facet | Dixon, H. Le Bihan, Herve |
| author_sort | Dixon, H. |
| building | Curtin Institutional Repository |
| collection | Online Access |
| description | The Generalised Calvo and the Generalised 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 dynamic stochastic general equilibrium model. The Generalised Taylor model is found to help rationalise the hump-shaped and persistent response of inflation, without resorting to the counterfactual assumption of systematic wage and price indexation. © 2012 The Author(s). The Economic Journal © 2012 Royal Economic Society. |
| first_indexed | 2025-11-14T10:03:42Z |
| format | Journal Article |
| id | curtin-20.500.11937-55666 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| last_indexed | 2025-11-14T10:03:42Z |
| publishDate | 2012 |
| publisher | Wiley-Blackwell |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-556662017-09-13T16:10:52Z Generalised Taylor and Generalised Calvo Price and Wage Setting: Micro-evidence with Macro Implications Dixon, H. Le Bihan, Herve The Generalised Calvo and the Generalised 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 dynamic stochastic general equilibrium model. The Generalised Taylor model is found to help rationalise the hump-shaped and persistent response of inflation, without resorting to the counterfactual assumption of systematic wage and price indexation. © 2012 The Author(s). The Economic Journal © 2012 Royal Economic Society. 2012 Journal Article http://hdl.handle.net/20.500.11937/55666 10.1111/j.1468-0297.2012.02497.x Wiley-Blackwell restricted |
| spellingShingle | Dixon, H. Le Bihan, Herve Generalised Taylor and Generalised Calvo Price and Wage Setting: Micro-evidence with Macro Implications |
| title | Generalised Taylor and Generalised Calvo Price and Wage Setting: Micro-evidence with Macro Implications |
| title_full | Generalised Taylor and Generalised Calvo Price and Wage Setting: Micro-evidence with Macro Implications |
| title_fullStr | Generalised Taylor and Generalised Calvo Price and Wage Setting: Micro-evidence with Macro Implications |
| title_full_unstemmed | Generalised Taylor and Generalised Calvo Price and Wage Setting: Micro-evidence with Macro Implications |
| title_short | Generalised Taylor and Generalised Calvo Price and Wage Setting: Micro-evidence with Macro Implications |
| title_sort | generalised taylor and generalised calvo price and wage setting: micro-evidence with macro implications |
| url | http://hdl.handle.net/20.500.11937/55666 |