Studies of the Impact of Low Inflation and Minimum Wages on Employment and Welfare

本研究由四个项目组成。 第一部分将分析低通货膨胀和最低工资立法对就业和福利的影响。 第一个要解决的问题是低通胀带来的低税收扭曲带来的好处。 马丁·费尔德斯坦（Martin Feldstein）估计，将通货膨胀率从2%降至零的福利收益为国民生产总值的1.01%。 这些计算将重新进行，考虑到费尔德斯坦模型中省略的四个因素。 这四个因素是：储蓄利息收入的行为反应的变化后，税后储蓄回报率，避税，收入分配的好处，并在实物资本回报率的下降与资本存量的增加。 这些因素如果得到适当的考虑，就会导致对零通货膨胀导致的低税收扭曲的福利效益的评估发生重大变化，很可能导致追求这一目标造成的福利损失。 第二个项目将是对模型的理论和实证研究，在这些模型中，通货膨胀进入价格和工资决定的方式随着通货膨胀接近零而发生质的变化。 价格稳定的倡导者声称，追求这一目标的原因之一是，在许多经济决策中可以忽略通货膨胀。 如果有相当一部分决策者在非常低的通货膨胀率下忽略了工资和价格决策中的通货膨胀，那么如果通货膨胀足够低，通货膨胀和失业之间就会有很大的权衡。 这样的行为将接近理性，因为价格和工资制定者的损失将随着通货膨胀的平方而变化。 该模型将产生一个适度但大于零的最佳通货膨胀率。 第三个项目将审议最低工资立法对就业的影响。 PI将使用与其早期评估极低通胀率下名义工资刚性对就业影响的工作相同的方法来计算真实的最低工资变化对就业的影响。 他们将探讨这两种效应之间的差异。 他们还将估计最低工资变化对价格的影响程度。 第四个项目将继续开展先前关于名义工资刚性的工作。 PI将使用国际数据测试他们早期的模型。 他们还将使用合同数据，通过检查合同中通货膨胀变为负值的不可抗力条款，来了解人们在通货膨胀率高于零的时候，认为如果通货膨胀率实际上下降到零，他们可能会采取什么行动。 PI的将开发一个一般模型的independence，包括理性和非理性的元素，借用席勒的工作，在人们所说的independence，特别是，将看到合同是否规定在通货紧缩的情况下给予回报，或者他们是否明确禁止他们。

This research consists of four project. The first will analyze the impact of low inflation and minimum wage legislation on employment and welfare. The first question that will be addressed is the benefits from lower tax distortions of lower inflation. Martin Feldstein has estimated the welfare benefits of reducing inflation from two percent to zero as 1.01 percent of GNP. These calculations will be redone taking account of four factors omitted in the Feldstein model. Those four factors are: behavioral responses of savings out of interest income to changes in after tax rates of return on savings, tax shelters, the distribution of benefits by income, and the fall in the rate of return on physical capital with increases in the capital stock. These factors properly considered should result in significant changes in the evaluation of the welfare benefits of lower tax distortions from zero inflation, quite possibly leading to a loss in welfare from pursuit of such a goal. The second project will be the theoretical and empirical consideration of models in which the way inflation enters price and wage decisions changes qualitatively as inflation nears zero. Advocates of price stability have claimed that one of the reasons for pursuit of that goal is that inflation could then be ignored in many economic decisions. If some significant fraction of decision makers ignore inflation in wage and price decisions at very low inflation, there will be a significant trade-off between inflation and unemployment if inflation is low enough. Such behavior will be near rational since the losses to price and wage setters will vary with the square of inflation. The model will yield an optimal rate of inflation which is moderate, but greater than zero. The third project will consider the effects of minimum wage legislation on employment. The PI's will use the same approach as in their earlier work on evaluating the employment impact of nominal wage rigidity at very low inflation to calculate the impact of changes in the real minimum wage on employment. They will explore the differences between the two types of effects. They will also estimate the size of the pass through of changes in minimum wages onto prices. The fourth project will continue the earlier work on nominal wage rigidity. The PI's will test their earlier model using international data. They also will use contract data to see how people now, in times of higher than zero inflation, think that they might behave if inflation should actually fall to zero, by examining indexation provisions in contracts where inflation becomes negative. The PI's will develop a general model of indexation, incorporating both rational and irrational elements, borrowing on the work of Shiller in terms of what people say about indexation and, in particular, will see whether contracts provide for give-backs in the event of deflation, or whether they specifically prohibit them.