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DESCRIPTION;ENCODING=QUOTED-PRINTABLE:Research Seminar - Renato Faccini (Danmarks Nationalbank) - Beyond the Phillips curve trade-off: How to decrease inflation while increasing aggregate demand =0D=0A Co-authors: Saman Darougheh (Danmarks Nationalbank) and Leonardo Melosi (University of Warwick) =0D=0A Abstract: We develop a New Keynesian job-ladder model with endogenous on-the-job search and sequential auction bargaining. In this framework, an income tax, which is redistributed back to households as a lump-sum, decreases inflation while increasing aggregate demand. That is because income taxes reduce the incentives to search-on-the job, implying that bidding wars between firms to retain staff become less likely. As a result, wage costs fall and job creation rises. Moreover, the fall in the share of employed job seekers, also implies that a larger proportion of unemployed is brought into the production system. Using Danish administrative data, we provide some (preliminary) evidence on wage growth dynamics that is consistent with the predictions of the theoretical model. =0D=0A  =0D=0A Online Research seminars organized by the Bank of Finland's Research Unit are open to all researchers interested in the subjects covered.  Those wishing to attend a seminar are kindly asked to register in advance, by filling in  the Online Registration Form . =0D=0A The registration for each seminar is open until 9:00 am the day of the seminar. You will receive a link to join the seminar by email at the latest one hour before the seminar is scheduled to begin. =0D=0A
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DTSTART:20231123T083000Z
LOCATION:MS Teams
SUMMARY:Renato Faccini (Danmarks Nationalbank) - Beyond the Phillips curve trade-off: How to decrease inflation while increasing aggregate demand
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