Downward wage rigidity and optimal steady-state inflation
European Central Bank; Universitat de Girona
Extension of Erceg-Henderson-Levin (2000) model with asymmetric menu costs for wage setting to capture downward nominal and real wage rigidity; heterogeneous agents with idiosyncratic productivity shocks
intermediate goods firms: monopolistic competition with Rotemberg price adjustment costs; final goods firms: perfect competition
Table 5 p.32
Portugal baseline calibration with downward nominal and real wage rigidity