The fair wage hypothesis and disinflation costs: a DSGE approach
This paper seeks to examine the role of the fair wage hypothesis of the gift-exchange framework in improving the New Keynesian DSGE model performance in explaining disinflation costs. In simulated disinflations of different sizes, we compare the sacrifice ratio generated by two models - one with the...
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| Tipo de recurso: | tesis de maestría |
| Estado: | Versión publicada |
| Fecha de publicación: | 2025 |
| País: | Brasil |
| Institución: | Universidade de São Paulo (USP) |
| Repositorio: | Biblioteca Digital de Teses e Dissertações da USP |
| Idioma: | inglés |
| OAI Identifier: | oai:teses.usp.br:tde-29092025-105414 |
| Acceso en línea: | https://www.teses.usp.br/teses/disponiveis/12/12138/tde-29092025-105414/ |
| Access Level: | acceso abierto |
| Palabra clave: | Fair wage Behavioral New Keynesian DSGE Desinflações Disinflation DSGE comportamental Modelo Novo Keynesiano Monetary policy Política monetária Sacrifice ratio Taxa de sacrifício |
| Sumario: | This paper seeks to examine the role of the fair wage hypothesis of the gift-exchange framework in improving the New Keynesian DSGE model performance in explaining disinflation costs. In simulated disinflations of different sizes, we compare the sacrifice ratio generated by two models - one with the behavioral fair wage hypothesis and one without. We find that the model with the behavioral hypothesis generates higher sacrifice ratio than the standard model, aligned with empirical literature estimates. After decomposing the sacrifice ratio into two effects, we argue that without the behavioral assumption, the model fails in generating plausible sacrifice ratios, showing the importance of the fair wage hypothesis in explaining disinflation costs in New Keynesian DSGE models. |
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