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See searches and references containing NOMINAL RIGIDITY!NOMINAL RIGIDITY
Inertia of prices in economics
In economics, nominal rigidity, also referred to as price stickiness or wage stickiness, describes a situation in which a nominal price is slow to adjust
Nominal_rigidity
Cost of changing prices
original price level. When the nominal price level remains constant despite market change is said that there is nominal rigidity or price stickiness in the
Menu_cost
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
Calvo_(staggered)_contracts
Total market value of goods and services produced within a country
down into the contribution of each industry or sector of the economy. Nominal GDP is useful when comparing national economies on the international market
Gross_domestic_product
Topics referred to by the same term
which arises from over-dependence on prior experiences Real rigidity, and nominal rigidity, the resistance of prices and wages to market changes in macroeconomics
Rigidity
Geometric progression ratio that provides a constant rate of return over the time period
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Compound_annual_growth_rate
School of macroeconomics
showed in 1990 that real rigidities could interact with nominal rigidities to create significant disequilibrium. Real rigidities occur whenever a firm is
New_Keynesian_economics
Measure of increase in market value of goods
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Economic_growth
American economist (1959–2026)
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Perry_Mehrling
Economic theory
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Endogenous_growth_theory
School of thought in macroeconomics
real business cycle theory and new Keynesian economics contributed nominal rigidities (slow moving and periodic, rather than continuous, price changes also
New_classical_macroeconomics
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Measures of national income and output
Measures_of_national_income_and_output
Economic concept, a fixed price or wage
fixed to a relative value of another. Real rigidities can be distinguished from nominal rigidities, rigidities that do not adjust because prices can be
Real_rigidity
Heterodox theory of money
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Chartalism
School of macroeconomic thought
is a school of macroeconomics that advocates that central banks use a nominal GDP level target instead of inflation, unemployment, or other measures
Market_monetarism
Study of an economy as a whole
economists had reached a rough consensus. The market imperfections and nominal rigidities of new Keynesian theory were combined with rational expectations and
Macroeconomics
School of thought in monetary economics
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
Monetarism
Rare schools of economic thought
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Heterodox_economics
Macroeconomic method
consumption and output across countries; the extremely high correlation between nominal and real exchange rates; etc. They are mute on many policy related issues
Dynamic stochastic general equilibrium
Dynamic_stochastic_general_equilibrium
Generally accepted economic schools of thought
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Mainstream_economics
American economist and Nobel laureate (1941–2026)
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
William_Nordhaus
Schools of economic thought developed at elite colleges in the 1970s United States
discretionary changes in aggregate public spending and the short-term nominal interest rate. "Freshwater economists" often reject the effectiveness of
Saltwater and freshwater economics
Saltwater_and_freshwater_economics
Economics of regulation
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Regulatory_economics
Postwar academic movement in economics
(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)
Neoclassical_synthesis
School of economic thought
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Post-Keynesian_economics
(1990) showed that real rigidities could interact with nominal rigidities to create significant disequilibrium. Real rigidities occur whenever a firm is
History of macroeconomic thought
History_of_macroeconomic_thought
Subject inspired by evolutionary biology
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Evolutionary_economics
Growth model in economics
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
AK_model
Fusion of macroeconomic schools of thought
uses rational expectations. However, based on sticky prices and other rigidities, the synthesis does not embrace the complete neutrality of money proposed
New_neoclassical_synthesis
Macroeconomic theory
spend-side automatic fiscal stabilisation mechanism and establishes a nominal price anchor, utilising a buffer stock of employed labour. This is in contrast
Modern_Monetary_Theory
Study of the development of social production
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Political_economy
Analytical tool in economics
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Macroeconomic_model
Economic concept
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
Aggregate_supply
Total demand for final goods and services in an economy at a given time
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
Aggregate_demand
Macroeconomic theory
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Supply-side_economics
School of economic thought (1930s)
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Stockholm_School_(economics)
British economist
market. Other topics include imperfect competition in macroeconomics, nominal rigidity. Most of his work is New Keynesian. Dixon supports the High Speed 2
Huw_Dixon
Macroeconomic model
business-cycle fluctuations are accounted for by real, in contrast to nominal, shocks. RBC theory sees business cycle fluctuations as the efficient response
Real_business-cycle_theory
Holds that money is created endogenously by the banking sector
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Monetary_circuit_theory
British economist (1904–1989)
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
John_Hicks
Inflation driven by a rise in the cost of goods and services
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Cost-push_inflation
Branch of economics covering theories of money
Archived 2023-01-16 at the Wayback Machine • Tack Yun, 1996. "Nominal Price Rigidity, Money Supply Endogeneity, and Business Cycles," Journal of Monetary
Monetary_economics
Decrease in the general price level
must be sold for money in order to finance payments that remain fixed in nominal terms, as many debt obligations may. Economists generally believe that
Deflation
Macro model in economics
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
Taylor_contract_(economics)
Devaluation of money's purchasing power
the future. Positive effects include reducing unemployment due to nominal wage rigidity, allowing the central bank greater freedom in carrying out monetary
Inflation
Group of macroeconomic theories
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
Keynesian_economics
International spending of petroleum export revenues
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Petrodollar_recycling
Percentage of a sum of money charged for its use
rate, prime rate, yield to maturity, and internal rate of return. The nominal interest rate is the interest rate without adjusting for inflation, whereas
Interest_rate
Economic concept
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Investment_(macroeconomics)
Policy of interest rates or money supply
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
Monetary_policy
Economic Model
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Arrow–Debreu_model
School of economic thought
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Austrian_school_of_economics
Swedish economist (1851–1926)
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Knut_Wicksell
American economist and Nobel Laureate (born 1943)
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Thomas_J._Sargent
Use of government revenue collection and expenditure to influence a country's economy
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Fiscal_policy
Theory of equilibrium between supply and demand
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
General_equilibrium_theory
Process and policies to improve economic well-being
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Economic_development
Type of inflation where aggregate demand increases faster than aggregate supply
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Demand-pull_inflation
School of economic thought
Drèze expanded on the disequilibrium tradition and worked to explain price rigidity instead of simply assuming it. Malinvaud used disequilibrium analysis to
Disequilibrium_macroeconomics
Sum of a country's private and public saving
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
National_saving
High inflation, low economic growth, and high unemployment
factors only. Nominal factors like changes in the money supply only affect nominal variables like inflation. The neoclassical idea that nominal factors cannot
Stagflation
Object or record accepted as payment
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Money
Part of the national accounts of the United States
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
National Income and Product Accounts
National_Income_and_Product_Accounts
American economist (1867–1947)
distinction between real and nominal interest rates: r=(1+i)(1+π)−1≃i−π where r is the real interest rate, i is the nominal interest rate, and the inflation
Irving_Fisher
Ideological faction within the Democratic Party
Philippe Aghion and Peter Howitt (and then Joel Mokyr) argued that nominal rigidity or "sticky wages" did not always warrant Keynesian monetary stimulation
New_Democrats_(United_States)
Model of long-run economic growth
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Solow–Swan_model
Macroeconomic model relating interest rates and output
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
IS–LM_model
Concept in economics
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
Multiplier_(economics)
American economist and statistician (1901–1985)
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Simon_Kuznets
Approach to economics
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Neoclassical_economics
Economics concept
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Rational_expectations
American economist
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Hyman_Minsky
Concept in economics
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Keynesian_cross
Economy's supply of money that is determined endogenously
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Endogenous_money
Situation described in Keynesian economics
in which conventional monetary policies have become impotent, because nominal interest rates are at or near zero: injecting monetary base into the economy
Liquidity_trap
Value of banknotes and coins still issued
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Currency_in_circulation
Framework in macroeconomics
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Overlapping_generations_model
Interest seen as a reward for parting with liquidity
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Liquidity_preference
American economist (born 1958)
Laurence M. Ball and David Romer on the interaction between real and nominal rigidities. In 2002, Mankiw and Ricardo Reis proposed an alternative to the widely
Greg_Mankiw
Demand in a constrained marketplace
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Effective_demand
British macroeconomist (born 1943)
Minford, Vo Phuong Mai Le, David Meenagh, and Michael Wickens "How much nominal rigidity is there in the US economy? Testing a New Keynesian DSGE Model using
Patrick_Minford
U.S. national technical standards for threads on pipes and pipe fittings
both tapered and straight thread series for various purposes, including rigidity, pressure-tight sealing, or both. The types are named with a full name
National_pipe_thread
Economic model relating wages to unemployment
hdl:10230/360. JSTOR 2565488. Blanchard, Olivier; Galí, Jordi (2007). "Real Wage Rigidities and the New Keynesian Model" (PDF). Journal of Money, Credit, and Banking
Phillips_curve
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
List of unsolved problems in economics
List_of_unsolved_problems_in_economics
Reduction of quantity/quality of a good without corresponding price reduction
and shrinking products. Economics portal Purchasing power Real versus nominal value (economics) Deflation "The Grocery Shrink Ray" Size–weight illusion
Shrinkflation
People without work and actively seeking work
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
Unemployment
Process by which the money supply of an economic region is increased
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Money_creation
Macroeconomic model relating aggregate demand and supply
the nominal variable is the rate of inflation rather than the price level, and where monetary policy is specified as a Taylor rule for the nominal interest
AD–AS_model
Sudden event that temporarily changes the supply of goods or services
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Supply_shock
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Comparison of Marxian and Keynesian economics
Comparison_of_Marxian_and_Keynesian_economics
Economic theory
pushes up average wages and decreases employment. Hence nominal wages tend to display downward rigidity. In equilibrium, all firms pay the same wage above
Shapiro–Stiglitz_theory
Positive effect of growth on private fixed investment
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Accelerator_effect
British economist and Nobel Laureate (1913–1991)
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Richard_Stone
Formation of expectations based on past events
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Adaptive_expectations
American economist (born 1953)
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Paul_Krugman
Total value of money available in an economy at a specific point in time
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
Money_supply
School of economic thought
claims relating to inconsistency, failed predictions, and scrutiny of nominally communist countries' economic planning in the 20th century. According
Marxian_economics
Adaptive Rational Government debt Investment Saving Microfoundations Nominal rigidity Shocks Demand Supply Policies Fiscal Austerity Government spending
List of countries by long-term unemployment rate
List_of_countries_by_long-term_unemployment_rate
Rise of wage adjusted for inflation
Real wage growth is an increase in wages adjusted for inflation, while nominal wage growth is not adjusted. It is often expressed as an annual percentage
Wage_growth
Concept in economics
Generally, the nominal demand for money increases with the level of nominal output (price level times real output) and decreases with the nominal interest rate
Demand_for_money
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