The Negative Mean Output Gap is popular PDF and ePub book, written by Mr.Shekhar Aiyar in 2019-08-23, it is a fantastic choice for those who relish reading online the Business & Economics genre. Let's immerse ourselves in this engaging Business & Economics book by exploring the summary and details provided below. Remember, The Negative Mean Output Gap can be Read Online from any device for your convenience.
The Negative Mean Output Gap Book PDF Summary
We argue that in an economy with downward nominal wage rigidity, the output gap is negative on average. Because it is more difficult to cut wages than to increase them, firms reduce employment more during downturns than they increase employment during expansions. This is demonstrated in a simple New Keynesian model with asymmetric wage adjustment costs. Using the model's output gap as a benchmark, we further show that common output gap estimation methods exhibit a systematic bias because they assume a zero mean. The bias is especially large in deep recessions when potential output tends to be most severely underestimated.
Detail Book of The Negative Mean Output Gap PDF
- Author : Mr.Shekhar Aiyar
- Release : 23 August 2019
- Publisher : International Monetary Fund
- ISBN : 9781513512747
- Genre : Business & Economics
- Total Page : 24 pages
- Language : English
- PDF File Size : 7,7 Mb
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