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Staggered Wages, Sticky Prices, and Labor Market Dynamics in Matching Models
Neugebauer, Janett | Wesselbaum, Dennis
Applied Economics Quarterly, Vol. 60 (2014), Iss. 3 : pp. 159–177
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University of Kiel, Kiel, Germany.
Department of Economics, University of Hamburg, Hamburg, Germany. Kiel Institute for the World Economy, DPG, EABCN.
Abstract
This paper estimates a search and matching model using Bayesian methods. We deviate from the existing literature in two ways. First, we provide a cross-country analysis by estimating the model for the United States and Australia. We document differences in structural parameters and key driving forces of business cycle fluctuations. Second, we find that staggered wages rather than sticky prices matter to fit the data.
JEL Codes: C11, E24, J6.