Sticky-Wage Models and Knowledge Capital

ISER DP No. 1046

23 Pages Posted: 29 Jan 2019

See all articles by Kevin X. D. Huang

Kevin X. D. Huang

Federal Reserve Bank of Philadelphia; Vanderbilt University - College of Arts and Science - Department of Economics

Munechika Katayama

Waseda University - School of Political Science and Economics

Mototsugu Shintani

University of Tokyo - Research Center for Advanced Science and Technology (RCAST)

Takayuki Tsuruga

Osaka University, Institute of Social and Economic Research

Date Written: January 15, 2019

Abstract

We present a sticky-wage model with two types of labors: while worker's labor contributes to current production, researcher's work helps develop new ideas to add to firm's knowledge capital that enhances its productivity for many periods. The long-lived effect of knowledge capital on productivity is analogous to the long-lasting effect of consumer durables on utility in the sticky-price model of Barsky, House and Kimball (2007). Our sticky-wage model generates the near monetary neutrality result similar to the result in their sticky-price model, if returns to researchers' labor are low in developing knowledge capital. We show, however, that the relative role of the pricing of the two production inputs analogous to consumption durables and nondurables in their sticky-price model is completely reversed in our sticky-wage model.

Keywords: Intangible Capital, Wage Rigidity, Monetary Policy

JEL Classification: E22, E24, E31, E52

Suggested Citation

Huang, Kevin X. D. and Katayama, Munechika and Shintani, Mototsugu and Tsuruga, Takayuki, Sticky-Wage Models and Knowledge Capital (January 15, 2019). ISER DP No. 1046. Available at SSRN: https://ssrn.com/abstract=3317309 or http://dx.doi.org/10.2139/ssrn.3317309

Kevin X. D. Huang

Federal Reserve Bank of Philadelphia ( email )

Ten Independence Mall
Philadelphia, PA 19106-1574
United States

Vanderbilt University - College of Arts and Science - Department of Economics ( email )

Box 1819 Station B
Nashville, TN 37235
United States

Munechika Katayama

Waseda University - School of Political Science and Economics ( email )

1-6-1 Nishi-Waseda
Shinjuku-ku, Tokyo 169-8050, Tokyo 169-8050
Japan

Mototsugu Shintani

University of Tokyo - Research Center for Advanced Science and Technology (RCAST) ( email )

4-6-1 Komaba Megro-ku
Tokyo, 153-8904
Japan

Takayuki Tsuruga (Contact Author)

Osaka University, Institute of Social and Economic Research ( email )

6-1 Mihogaoka
Ibaraki, 567-0047
Japan

HOME PAGE: http://www.iser.osaka-u.ac.jp/~tsuruga/

Register to save articles to
your library

Register

Paper statistics

Downloads
2
Abstract Views
69
PlumX Metrics