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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Erceg, C.J. (2018). Monetary Business Cycle Models (Sticky Prices and Wages). In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_2852
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DOI: https://doi.org/10.1057/978-1-349-95189-5_2852
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Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-95188-8
Online ISBN: 978-1-349-95189-5
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