Productivity Growth and Volatility: How Important are Wage and Price Rigidities?

27 Pages Posted: 26 Sep 2011  

Alessandra Pelloni

University of Rome II, Department of Economics

Barbara Annicchiarico

University of Rome, Tor Vergata - Department of Economics and Finance

Date Written: September, 26 2011

Abstract

We study the implications of having different sources of nominal rigidities on the relationship between productivity growth and shocks volatility in a model with procyclical R&D and imperfect competition in goods and labor markets. We show that the effects of uncertainty on long-term growth not only depends on the source of fluctuations, as recent literature shows, but also, and crucially, on whether prices and/or wages are rigid.

Keywords: productivity growth, volatility, nominal rigidities, uncertainty

JEL Classification: E32, E52, O42

Suggested Citation

Pelloni, Alessandra and Annicchiarico, Barbara, Productivity Growth and Volatility: How Important are Wage and Price Rigidities? (September, 26 2011). CEIS Working Paper No. 211. Available at SSRN: https://ssrn.com/abstract=1933706 or http://dx.doi.org/10.2139/ssrn.1933706

Alessandra Pelloni

University of Rome II, Department of Economics ( email )

Via Columbia n.2
Rome, rome 00100
Italy
390672595908 (Phone)

Barbara Annicchiarico (Contact Author)

University of Rome, Tor Vergata - Department of Economics and Finance ( email )

Rome, I-00133
Italy

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