Journal Article

Is there a persistence problem? Part 2: Maybe not

Abstract: In Part 1 of this two-part series, Evan Koenig explains why some economists are skeptical that staggered price adjustment can account for monetary policy's sustained effects on aggregate economic activity. In Part 2, Koenig looks at labor-market imperfections as a possible source of persistence. He concludes that persistence is much easier to obtain if either labor cannot move freely from firm to firm or wages are set in overlapping wage contracts.

Keywords: Monetary policy; Employment (Economic theory);

Bibliographic Information

Provider: Federal Reserve Bank of Dallas

Part of Series: Economic and Financial Policy Review

Publication Date: 2000

Issue: Q IV

Pages: 11-19