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- W2009505145 abstract "The optimal infation rate and the relationship between inflation and unemployment are central issues in macroeconomics. It is widely accepted that inflation is a monetary phenomenon. However, there is little consensus with regard to unemployment. Economists differ widely in their view of labor markets and wage-setting mechanisms. The present paper develops a search-theoretic monetary model with imperfect labor markets. It studies the issue of the optimal inflation rate and the relationship between inflation and unemployment under four widely used wage-setting mechanisms: search and matching, wage posting, union bargaining, and efficiency wage. It finds that a higher inflation rate reduces output and employment under all wage setting mechanisms. The Friedman rule is not optimal under any wage setting mechanism except wage posting." @default.
- W2009505145 created "2016-06-24" @default.
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- W2009505145 date "2013-12-17" @default.
- W2009505145 modified "2023-09-22" @default.
- W2009505145 title "Labor Markets, Unemployment and Optimal Inflation" @default.
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