Understanding the gains from wage flexibility: The exchange rate connection

We study the gains from increased wage flexibility and their dependence on exchange rate policy, using a small open economy model with staggered price andwage setting. Two results stand out: (i) the impact of wage adjustments on employment is smaller the more the central bank seeks to stabilize the exchange rate,and (ii) an increase in wage flexibility often reduces welfare, and more likely so ineconomies under an exchange rate peg or an exchange rate-focused monetary policy.Our findings call into question the common view that wage flexibility is particularlydesirable in a currency union.

Benefit News: Employee Benefit News, Department of Administrative Services, December 2009

Benefit News, brought to you by the DAS Benefits Team, providing you with the most up-to-date information about the state of Iowa’s employee benefits.

Benefit News: Employee Benefit News, Department of Administrative Services, June 2009

Benefit News, brought to you by the DAS Benefits Team, providing you with the most up-to-date information about the state of Iowa’s employee benefits.

Benefit News: Employee Benefit News, Department of Administrative Services, September 2009

Benefit News, brought to you by the DAS Benefits Team, providing you with the most up-to-date information about the state of Iowa’s employee benefits.

Benefit News: Employee Benefit News, Department of Administrative Services, December 2010

Benefit News, brought to you by the DAS Benefits Team, providing you with the most up-to-date information about the state of Iowa’s employee benefits.

Benefit News: Employee Benefit News, Department of Administrative Services, June 2010

Benefit News, brought to you by the DAS Benefits Team, providing you with the most up-to-date information about the state of Iowa’s employee benefits.

Benefit News: Employee Benefit News, Department of Administrative Services, March 2010

Benefit News, brought to you by the DAS Benefits Team, providing you with the most up-to-date information about the state of Iowa’s employee benefits.

Benefit News: Employee Benefit News, Department of Administrative Services, September 2010

Benefit News, brought to you by the DAS Benefits Team, providing you with the most up-to-date information about the state of Iowa’s employee benefits.

Benefit News: Employee Benefit News, Department of Administrative Services, December 2011

Benefit News, brought to you by the DAS Benefits Team, providing you with the most up-to-date information about the state of Iowa’s employee benefits.

Benefit News: Employee Benefit News, Department of Administrative Services, September 2011

Benefit News, brought to you by the DAS Benefits Team, providing you with the most up-to-date information about the state of Iowa’s employee benefits.

Benefit News: Employee Benefit News, Department of Administrative Services, June 2011

Benefit News, brought to you by the DAS Benefits Team, providing you with the most up-to-date information about the state of Iowa’s employee benefits.

Benefit News: Employee Benefit News, Department of Administrative Services, March 2011

Benefit News, brought to you by the DAS Benefits Team, providing you with the most up-to-date information about the state of Iowa’s employee benefits.

Benefit News: Employee Benefit News, Department of Administrative Services, June 2012

Benefit News, brought to you by the DAS Benefits Team, providing you with the most up-to-date information about the state of Iowa’s employee benefits.

Benefit News: Employee Benefit News, Department of Administrative Services, March 2012

Benefit News, brought to you by the DAS Benefits Team, providing you with the most up-to-date information about the state of Iowa’s employee benefits.