How Do Nominal and Real Rigidities Interact? A Tale of the Second Best
在新凯恩斯模型中分析实际工资刚性与价格粘性的相互作用，发现实际刚性带来的福利成本可能远超名义摩擦，且存在实际刚性时提高价格粘性反而能改善福利。
This paper analyzes the importance of real wage rigidities, in particular through their interaction with price stickiness, in a New Keynesian model. Real wage rigidities result from a combination of staggered wage setting and partial indexation of nonreset wages to past inflation. Blanchard and Galí (2007) show real rigidities to introduce a trade‐off between stabilizing inflation and the welfare‐relevant output gap. The present paper complements their findings by showing that the welfare costs of real rigidities can be substantial compared to nominal frictions. In a typical “tale of the second best,” we also show that in the presence of real wage rigidities, higher price stickiness can be welfare enhancing.