Does State-Dependent Wage Setting Generate Multiple Equilibria?

No 991, KIER Working Papers from Kyoto University, Institute of Economic Research

Abstract: Does wage setting exhibit strategic complementarity and produce multiple equilib- ria? This study constructs a discrete-time New Keynesian model in which the timing of individual wage adjustments is endogenous. I explore steady-state equilibrium of the state-dependent wage-setting model both analytically and numerically. For reasonable parameter values, complementarity in wage setting is weak and multiple equilibria are unlikely to exist at the steady state. The uniqueness of equilibrium is robust to imperfect consumption insurance.

Keywords: State-dependent wage setting; New Keynesian model; Multiple equilibria; Strategic complementarity; Incomplete markets; Deflation (search for similar items in EconPapers)
JEL-codes: E24 E31 E32 E52 (search for similar items in EconPapers)
Pages: 50pages
Date: 2018-05
New Economics Papers: this item is included in nep-dge, nep-ias and nep-mac
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.kier.kyoto-u.ac.jp/DP/DP991.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kyo:wpaper:991

Access Statistics for this paper

More papers in KIER Working Papers from Kyoto University, Institute of Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by Makoto Watanabe ().