New essay: It was a mistake to switch to sticky price models from sticky wage modelshttps://basilhalperin.com/essays/sticky-prices-vs-sticky-wages.html TLDR: Intuitively, wage stickiness seems more important than price stickiness The first microfounded ‘new Keynesian’ models did use wage stickiness, not price stickiness; but in the mid-1980s there was a transit…
| Basil H |