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monetary business cycle models (sticky prices and wages)

Christopher J. Erceg
From The New Palgrave Dictionary of Economics, Second Edition, 2008
Edited by Steven N. Durlauf and Lawrence E. Blume
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Abstract

Monetary business cycle (MBC) models are general equilibrium models designed to analyse how monetary shocks affect output, prices, and interest rates. This article describes the analytic framework underlying sticky prices and wages in modern MBC models, and highlights the prominent role that these rigidities play in the transmission of nominal and real shocks.
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How to cite this article

Erceg, Christopher J. "monetary business cycle models (sticky prices and wages)." The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. 23 July 2017 <http://www.dictionaryofeconomics.com/article?id=pde2008_M000403> doi:10.1057/9780230226203.1118

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