Imperfect Information and Wage Inertia in the Business Cycle Export

@article{gertler-82, abstract = {Nominal wages have less variation about a trend than the money supply does, and the variation is more persistent. This inertia in the nominal wage is often cited as the principal source of stagflation. This paper explains the phenomenon by appealing to temporary wage inflexibility in an environment where agents cannot directly disentangle permanent versus transitory movements in key state variables. A wage equation results that is a distributed lag of previous values of the state variables, including money. Nominal wage variation becomes less sensitive to the money supply as agents' ability to detect the permanent evolution of the money supply declines.}, author = {Gertler, Mark}, citeulike-article-id = {175077}, citeulike-linkout-0 = {http://www.jstor.org/stable/1837128}, journal = {The Journal of Political Economy}, keywords = {aarmacro, efficiency\_wage, rbc}, number = {5}, pages = {967--987}, posted-at = {2005-04-30 21:38:41}, priority = {2}, title = {Imperfect Information and Wage Inertia in the Business Cycle}, url = {http://www.jstor.org/stable/1837128}, volume = {90}, year = {1982} }

TY - JOUR ID - gertler-82 L3 - citeulike-article-id:175077 N2 - Nominal wages have less variation about a trend than the money supply does, and the variation is more persistent. This inertia in the nominal wage is often cited as the principal source of stagflation. This paper explains the phenomenon by appealing to temporary wage inflexibility in an environment where agents cannot directly disentangle permanent versus transitory movements in key state variables. A wage equation results that is a distributed lag of previous values of the state variables, including money. Nominal wage variation becomes less sensitive to the money supply as agents' ability to detect the permanent evolution of the money supply declines. IS - 5 JF - The Journal of Political Economy EP - 987 TI - Imperfect Information and Wage Inertia in the Business Cycle VL - 90 SP - 967 KW - aarmacro KW - efficiency_wage KW - rbc AU - Gertler, Mark PY - 1982/// UR - http://www.jstor.org/stable/1837128 ER -