Job insecurity, equilibrium determinacy and E-stability in a New Keynesian model with asymmetric information. Theory and simulation analysis
Fuente:
arXiv
Enregistré dans:
| Auteurs principaux: | , |
|---|---|
| Format: | Preprint |
| Publié: |
2025
|
| Sujets: | |
| Accès en ligne: | |
| Tags: |
Ajouter un tag
Pas de tags, Soyez le premier à ajouter un tag!
|
| _version_ | 1866909966033485824 |
|---|---|
| author | Vota, Luca Errichiello, Luisa |
| author_facet | Vota, Luca Errichiello, Luisa |
| contents | Departing from the dominant approach focused on individual and meso-level determinants, this paper develops a macroeconomic formalization of job insecurity within a New Keynesian framework in which the standard IS-NKPC-Taylor rule block is augmented with labor-market frictions. The model features partially informed private agents who receive a noisy signal about economic fundamentals from a fully informed public sector. When monetary policy satisfies the Taylor principle, the equilibrium is unique and determinate. However, the release of news about current or future fundamentals can generate a "Paradox of Transparency" through general-equilibrium interactions between aggregate demand and monetary policy. When the Taylor principle is violated, belief-driven equilibria may emerge. Validation exercises based on the Simulated Method of Moments support the empirical plausibility of the model's key implications. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2512_13627 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | Job insecurity, equilibrium determinacy and E-stability in a New Keynesian model with asymmetric information. Theory and simulation analysis Vota, Luca Errichiello, Luisa General Economics Economics Departing from the dominant approach focused on individual and meso-level determinants, this paper develops a macroeconomic formalization of job insecurity within a New Keynesian framework in which the standard IS-NKPC-Taylor rule block is augmented with labor-market frictions. The model features partially informed private agents who receive a noisy signal about economic fundamentals from a fully informed public sector. When monetary policy satisfies the Taylor principle, the equilibrium is unique and determinate. However, the release of news about current or future fundamentals can generate a "Paradox of Transparency" through general-equilibrium interactions between aggregate demand and monetary policy. When the Taylor principle is violated, belief-driven equilibria may emerge. Validation exercises based on the Simulated Method of Moments support the empirical plausibility of the model's key implications. |
| title | Job insecurity, equilibrium determinacy and E-stability in a New Keynesian model with asymmetric information. Theory and simulation analysis |
| topic | General Economics Economics |
| url | https://arxiv.org/abs/2512.13627 |