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Monetary policy in an economy with nominal wage contracts

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  • Charles T. Carlstrom

Abstract

A demonstration that optimal monetary policy can be either procyclical or countercyclical in a model where wages are \"sticky\" because of a nominal contracting constraint.

Suggested Citation

  • Charles T. Carlstrom, 1987. "Monetary policy in an economy with nominal wage contracts," Working Papers (Old Series) 8710, Federal Reserve Bank of Cleveland.
    • Handle: RePEc:fip:fedcwp:8710
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    References listed on IDEAS

    as
    1. Fischer, Stanley, 1977. "Long-Term Contracts, Rational Expectations, and the Optimal Money Supply Rule," Journal of Political Economy, University of Chicago Press, vol. 85(1), pages 191-205, February.
    2. Grossman, Sanford J & Shiller, Robert J, 1981. "The Determinants of the Variability of Stock Market Prices," American Economic Review, American Economic Association, vol. 71(2), pages 222-227, May.
    3. Lucas, Robert Jr., 1972. "Expectations and the neutrality of money," Journal of Economic Theory, Elsevier, vol. 4(2), pages 103-124, April.
    4. Friend, Irwin & Blume, Marshall E, 1975. "The Demand for Risky Assets," American Economic Review, American Economic Association, vol. 65(5), pages 900-922, December.
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    Keywords

    Monetary policy; Wages;

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