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dc.contributor.authorDriscoll, John C.
dc.contributor.authorHolden, Steinar
dc.date.accessioned2018-05-22T08:57:03Z
dc.date.available2018-05-22T08:57:03Z
dc.date.issued2002
dc.identifier.isbn82-7553-207-8
dc.identifier.issn0801-2504
dc.identifier.urihttp://hdl.handle.net/11250/2498662
dc.description.abstractMost wage-contracting models with rational expectations fail to replicate the persistence in inflation observed in the data. We argue that coordination problems and multiple equilibria are the keys to explaining inflation persistence. We develop a wage-contracting model in which workers are concerned about being treated fairly. This model generates a continuum of equilibria (consistent with a range for the rate of unemployment), where workers want to match the wage set by other workers. If workers’ expectations are based on the past behavior of wage growth, these beliefs will be self-fulfilling and thus rational. Based on quarterly U.S. data over the period 1955-2000, we find evidence that inflation is more persistent between unemployment rates of 4.7 and 6.5 percent, than outside these bounds, as predicted by our model.nb_NO
dc.language.isoengnb_NO
dc.publisherNorges Banknb_NO
dc.relation.ispartofseriesWorking Papers;15/2002
dc.rightsAttribution-NonCommercial-NoDerivatives 4.0 Internasjonal*
dc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/4.0/deed.no*
dc.subjectJEL: E31nb_NO
dc.subjectJEL: E3nb_NO
dc.subjectJEL: E5nb_NO
dc.subjectinflation persistencenb_NO
dc.subjectcoordination problemsnb_NO
dc.subjectadaptive expectationsnb_NO
dc.titleCoordination, Fair Treatment and Inflation Persistencenb_NO
dc.typeWorking papernb_NO
dc.description.versionupdatedVersionnb_NO
dc.subject.nsiVDP::Samfunnsvitenskap: 200::Økonomi: 210::Samfunnsøkonomi: 212nb_NO
dc.source.pagenumber32nb_NO


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Attribution-NonCommercial-NoDerivatives 4.0 Internasjonal
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