Determination of Revisiting Staggered Wages to Consider Discounting

Authors

  • Patricia Bonini State University of Santa Catarina, Florianopolis SC 88049970, Brazil.
  • Sergio Da Silva Graduate Program in Economics, Federal University of Santa Catarina, Florianopolis SC 88049970, Brazil.

DOI:

https://doi.org/10.9734/bpi/mpebm/v5/3391F

Keywords:

Staggered wage model, time-consistent steady inflation, discounting, microfoundation, benchmark model

Abstract

The discount factor in the workers' loss function is ignored in the literature on staggered wages. Discounting, on the other hand, should be regarded as an additional microfoundation with implications for discretionary monetary policy. This study highlights that discounting in the model of staggered wages actually lowers the time-consistent steady inflation. We reexamine the topic and show that under the scenario of staggered wages, discounting reduces time-consistent steady inflation.

Published

2021-08-20

How to Cite

Patricia Bonini, & Sergio Da Silva. (2021). Determination of Revisiting Staggered Wages to Consider Discounting. Modern Perspectives in Economics, Business and Management Vol. 5, 58–63. https://doi.org/10.9734/bpi/mpebm/v5/3391F

Issue

Modern Perspectives in Economics, Business and Management Vol. 5

Section

Chapters