TY  - UNPD
A1  - Faia, Ester
A1  - Pezone, Vincenzo
T1  - Monetary policy and the cost of wage rigidity : evidence from the stock market
T2  - SAFE working paper series ; No. 242
N2  - Using a unique confidential contract level dataset merged with firm-level asset price data, we find robust evidence that firms' stock market valuations and employment levels respond more to monetary policy announcements the higher the degree of wage rigidity. Data on the renegotiations of collective bargaining agreements allow us to construct an exogenous measure of wage rigidity. We also find that the amplification induced by wage rigidity is stronger for firms with high labor intensity and low profitability, providing evidence of distributional consequences of monetary policy. We rationalize the evidence through a model in which firms in different sectors feature different degrees of wage rigidity due to staggered renegotiations vis-a-vis unions.
T3  - SAFE working paper - 242 
KW  - heterogeneous monetary policy response
KW  - distributional consequences of monetary policy
KW  - employer-employee level dataset
KW  - monetary policy surprise shocks
KW  - heterogeneous wage rigidity
Y1  - 2019
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/48765
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-487651
UR  - https://ssrn.com/abstract=3326397
IS  - January 2018
PB  - SAFE
CY  - Frankfurt am Main
ER  -