Billi, Roberto M.Galí, Jordi, 1961-Universitat Pompeu Fabra. Departament d'Economia i Empresa2020-05-252020-05-252018-12-01http://hdl.handle.net/10230/44797We analyze the welfare impact of greater wage flexibility while taking into account explicitly the existence of the zero lower bound (ZLB) constraint on the nominal interest rate. We show that the ZLB constraint generally amplifies the adverse effects of greater wage flexibility on welfare when the central bank follows a conventional Taylor rule. When demand shocks are the driving force, the presence of the ZLB implies that an increase in wage áexibility reduces welfare even under the optimal monetary policy with commitment.application/pdfengL'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative CommonsGains from wage flexibility and the zero lower bound<resourceType xmlns="http://datacite.org/schema/kernel-3" resourceTypeGeneral="Other">info:eu-repo/semantics/workingPaper</resourceType><subject xmlns="http://datacite.org/schema/kernel-3" subjectScheme="keyword">labor market</subject><subject xmlns="http://datacite.org/schema/kernel-3" subjectScheme="keyword">flexibility</subject><subject xmlns="http://datacite.org/schema/kernel-3" subjectScheme="keyword">nominal rigidities</subject><subject xmlns="http://datacite.org/schema/kernel-3" subjectScheme="keyword">optimal monetary policy with commitment</subject><subject xmlns="http://datacite.org/schema/kernel-3" subjectScheme="keyword">taylor rule</subject><subject xmlns="http://datacite.org/schema/kernel-3" subjectScheme="keyword">zlb</subject><subject xmlns="http://datacite.org/schema/kernel-3" subjectScheme="keyword">Macroeconomics and International Economics</subject><rights xmlns="http://datacite.org/schema/kernel-3">info:eu-repo/semantics/openAccess</rights>