Template-Type: ReDIF-Paper 1.0
Author-Name:  Eurilton Araújo
Author-Name-First: Eurilton
Author-Name-Last: Araújo
Title: Real Wage Rigidity and the Taylor Principle
Abstract:  This paper investigates conditions for equilibrium determinacy under inflation-targeting interest-rate rules when the basic new Keynesian model is extended to incorporate real wage rigidity. I show that the introduction of real wage rigidity increases the determinacy region under forward-looking rules. Moreover, the Taylor principle continues to ensure equilibrium uniqueness under current-looking rules.
Length:  17 pages
Creation-Date:  2008
Order-URL: https://repositorio.insper.edu.br/handle/11224/5771
File-URL: https://repositorio.insper.edu.br/handle/11224/5771
File-Format: text/html
File-Function: Full text
Number: 011
Handle: RePEc:aap:wpaper:011