TY  - UNPD
A1  - Groshen, Erica L.
A1  - Schweitzer, Mark E.
T1  - Inflation and unemployment revisited: grease vs. sand
T2  - Institut für Kapitalmarktforschung (Frankfurt am Main): CFS working paper series ; No. 1999,06
N2  - As inflation rates in the United States decline, analysts are asking if there are economic reasons to hold the rates at levels above zero. Previous studies of whether inflation "greases the wheels" of the labor market ignore inflation's potential for disrupting wage patterns in the same market. This paper outlines an institutionally-based model of wage-setting that allows the benefits of inflation (downward wage flexibility) to be separated from disruptive uncertainty about inflation rate (undue variation in relative prices). Our estimates, using a unique 40-year panel of wage changes made by large mid-western employers, suggest that low rates of inflation do help the economy to adjust to changes in labor supply and demand. However, when inflation's disruptive effects are balanced against this benefit the labor market justification for pursuing a positive long-term inflation goal effectively disappears.
T3  - CFS working paper series - 1999, 06 
KW  - Inflation
KW  - Nominal Wage Rigidity
KW  - Wage Setting
KW  - Inflation
KW  - Arbeitsmarkttheorie
KW  - Beschäftigungstheorie
KW  - Arbeitsloser
KW  - Arbeitslosigkeit
KW  - Beschäftigungswirkung
Y1  - 1999
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/4540
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30-9568
UR  - https://www.ifk-cfs.de/788.html
IS  - Version: August 1998
EP  - 16
PB  - Inst. für Kapitalmarktforschung
CY  - Frankfurt am Main
ER  -