nominal rigidity, also known as price-stickiness or wage-stickiness, is a situation in which a nominal price is resistant to change. Complete nominal...

which arises from over-dependence on prior experiences Real rigidity, and nominal rigidity, the resistance of prices and wages to market changes in macroeconomics...

showed in 1990 that real rigidities could interact with nominal rigidities to create significant disequilibrium. Real rigidities occur whenever a firm is...

in-store goods. So, menu costs are one factor that can contribute to nominal rigidity. Firms are faced with the decision to alter prices frequently as a...

discrete time version. The Calvo model is the most common way to model nominal rigidity in new Keynesian DSGE macroeconomic models. We can define the probability...

a relative value of another.: 365  Real rigidities can be distinguished from nominal rigidities, rigidities that do not adjust because prices can be...

for money Liquidity preference Money supply National accounts SNA Nominal rigidity Price level Recession Shrinkflation Stagflation Supply shock Saving...

the future. Positive effects include reducing unemployment due to nominal wage rigidity, allowing the central bank greater freedom in carrying out monetary...

economists had reached a rough consensus. The market imperfections and nominal rigidities of new Keynesian theory was combined with rational expectations and...

(1990) showed that real rigidities could interact with nominal rigidities to create significant disequilibrium. Real rigidities occur whenever a firm is...

authorities to defend the gold parity of the pound sterling and the rigidity of nominal wages, he gradually adhered to protectionist measures. On 5 November...

real business cycle theory and new Keynesian economics contributed nominal rigidities (slow moving and periodic, rather than continuous, price changes also...

bound. Central banks typically use a nominal anchor to pin down expectations of private agents about the nominal price level or its path or about what...

loan money. Money supply in effect is perfectly inelastic with respect to nominal interest rates. Thus the money supply function is represented as a vertical...

to a nominal APR or an effective APR (EAPR). The difference between the two is that the EAPR accounts for fees and compounding, while the nominal APR does...

is useful as a policy target only if the relationship between money and nominal GDP, and therefore inflation, is stable and predictable. This implies that...

for money Liquidity preference Money supply National accounts SNA Nominal rigidity Price level Recession Shrinkflation Stagflation Supply shock Saving...

(1937) and A. Hansen (1949), the clarification of the role of the rigidity of nominal wages in the Keynesian model in the work of F. Modigliani (1944)...

conventionally measure such growth as the percent rate of increase in the real and nominal gross domestic product (GDP). Growth is usually calculated in real terms...

in which conventional monetary policies have become impotent, because nominal interest rates are at or near zero: injecting monetary base into the economy...

depicted, where: G stands for government spending T for taxation Y for nominal GDP I for private investment X for exports c for propensity to consume...

for money Liquidity preference Money supply National accounts SNA Nominal rigidity Price level Recession Shrinkflation Stagflation Supply shock Saving...

upward sloping: The short-run AS curve is drawn given some nominal variables such as the nominal wage rate, which is assumed fixed in the short run. Thus...

discretionary changes in aggregate public spending and the short-term nominal interest rate. "Freshwater economists" often reject the effectiveness of...

firms. The importance of the Taylor contract is that it introduces nominal rigidity into the economy. In macroeconomics if all wages and prices are perfectly...

Mundell–Fleming model portrays the short-run relationship between an economy's nominal exchange rate, interest rate, and output (in contrast to the closed-economy...

productivity gains by allowing workers to maintain or to increase their nominal wages during the secular deflation that caused real wages to rise at various...

for money Liquidity preference Money supply National accounts SNA Nominal rigidity Price level Recession Shrinkflation Stagflation Supply shock Saving...

the challenge becomes finding what source, if one even exists, of nominal rigidity that could be so persistent to explain the long-term prolonged nature...

pushes up average wages and decreases employment. Hence nominal wages tend to display downward rigidity. In equilibrium, all firms pay the same wage above...