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- W74646410 abstract "Publisher Summary This chapter discusses the wage contracting and exchange rate volatility. A frictionless model of the economy with wages and prices moving each period to clear the labor and goods markets is generally considered to be inconsistent with certain stylized facts about the real world. In such a model, employment and output adjust immediately to any economic disturbance, and there is no persistence of effects and no business cycle. Money is neutral in such an economy, and if monetary disturbances are the primary source of exchange rate and price level movements, then the model is incapable of explaining the apparent fact that exchange rates are more volatile than prices. The existence of wage contracting presumably benefits labor market participants and may also benefit portfolio managers by stabilizing the real interest rate, especially if goods market disturbances are an important source of price and exchange rate variation." @default.
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- W74646410 date "1983-06-01" @default.
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- W74646410 title "Wage Contracting, and Exchange Rate Volatility *" @default.
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- W74646410 doi "https://doi.org/10.1016/s1474-6670(17)62443-1" @default.
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