Insider–outsider labor markets, hysteresis, and monetary policy
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- dc.contributor.author Galí, Jordi, 1961-
- dc.date.accessioned 2025-05-16T05:47:02Z
- dc.date.available 2025-05-16T05:47:02Z
- dc.date.issued 2022
- dc.description.abstract I develop a version of the New Keynesian model with insider-outsider labor markets and hysteresis that can account for the high persistence of European unemployment. I study the implications of that environment for the design of monetary policy. The optimal policy calls for strong emphasis on (un)employment stabilization which a standard interest rate rule fails to deliver, with the gap between the two increasing in the degree of hysteresis. Two simple targetiing rules are shown to approximate well the optimal policy. The properties of the model and e¤ects of di¤erent policies are analyzed through the lens of the labor wedge and its components.
- dc.format.mimetype application/pdf
- dc.identifier.citation Galí J. Insider–outsider labor markets, hysteresis, and monetary policy. J Money Credit Bank. 2022 Feb;54(S1):53-88. DOI: 10.1111/jmcb.12898
- dc.identifier.doi http://dx.doi.org/10.1111/jmcb.12898
- dc.identifier.issn 0022-2879
- dc.identifier.uri http://hdl.handle.net/10230/70422
- dc.language.iso eng
- dc.publisher Wiley
- dc.relation.ispartof Journal of Money, Credit and Banking. 2022 Feb;54(S1):53-88
- dc.rights This is the peer reviewed version of the following article: Galí J. Insider–outsider labor markets, hysteresis, and monetary policy. J Money Credit Bank. 2022 Feb;54(S1):53-88. DOI: 10.1111/jmcb.12898, which has been published in final form at http://dx.doi.org/10.1111/jmcb.12898. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions.
- dc.rights.accessRights info:eu-repo/semantics/openAccess
- dc.subject.keyword Wage stickiness
- dc.subject.keyword New Keynesian model
- dc.subject.keyword Unemployment fluctuations
- dc.subject.keyword Wage Phillips curve
- dc.subject.keyword Monetary policy tradeoffs
- dc.title Insider–outsider labor markets, hysteresis, and monetary policy
- dc.type info:eu-repo/semantics/article
- dc.type.version info:eu-repo/semantics/acceptedVersion