Wage–price dynamics and income distribution in a semi-structural Keynes–Goodwin model

Reconsidering the Dynamic Interaction between Real Wages and Macroeconomic Activity

“…For starters it should be pointed out that the large majority of parameter estimates confirm previous estimates as discussed in Flaschel and Krolzig (2006) and Proaño et al (2006). This hold particularly true for the estimated parameters in both the wage and price inflation adjustment equations, what confirms the specification of the wage-spiral discussed in this paper.…”

“…All of the employed gaps are measured relative to the steady state of the model, in order to allow for an interest rate policy that is also consistent with the steady state. (2006), and Proaño et al (2006) for details.…”

Gradual wage-price adjustments, labor market frictions and monetary policy rules

“…To do so, we use a discrete time version of the 4D continuous time system discussed in the previous section, 23 using nevertheless alternative labor market specifications to the search framework described in section 3 in order to evaluate the dynamic properties of the model. On the one hand, we analyze a scenario where the labor markets function frictionless, 22 What would be consistent with the parameter values estimated by Franke et al (2006) and Proaño et al (2006) 23 The simulations were computed with MATLAB. The source code is available upon request.…”

“…Concerning the evolution of the overall inflationary expectations among the economic agents in the model economy, we follow Franke et al (2006) and assume that the dynamic behavior of the inflationary climate is described by 16…”

“…The source code is available upon request. (2006) and Franke et al (2006), according to which the growth rate of the employment rate is determined bŷ…”