1. Comments by Espen R. Moen
Mark Gertler, Luca Sala, Antonella Trigari, “An Estimated Monetary DSGE Model with Nominal Wage Bargaining”
Comments by Espen R. Moen

2. About the paper
Elaborates on a model by Gertler and Trigari that introduces search frictions in a model with Calvo pricing
Structurally estimates the model
Relevant for understanding the Shimer puzzle
Hard to reconcile the standard search- and matching model with business cycle facts

3. Structure of model DSGE model Representative agents
Habit formation
Two-layered production sector
Manufacturing firms: labor and capital inputs, constant returns to scale
Endogenous capital utuilization
Diamond-Mortensen-Pissarides search model
Calvo pricing in retail firms, Calvo wage setting in manufacturing firms
DMP –style search model of the labor market
Wage bargaining
Partly indexed wage contracts

4. Staggered wages complicates search model
Firms are heterogeneous, wages differ
More difficult to calculate the value of search to workers
All jobs are accepted
The model is structurally estimated (which data set?)
Some important parameters are assumed, while others are estimated (for instance the unemployment income)

5. Findings Replacement ratio: 0,75 Bargaining power of workers: 0,89
Lower than Hagerdorn and Manovskii, but higher than Shimer
Bargaining power of workers: 0,89
Higher than usual
Inefficient
Wage rigidity improves the fit of the model

6. Comments Complex model
Hard to get intuition for the results
What are the separate effects of each extension relative to the standard DMP-model?
Interesting to see partial effect of sticky wages on the dynamic properties of the model

7. Theory issues Sticky wages for new hires?
Refer to Menzio and Moen, but this is not fully appropriate
Degree of indexation – probably a choice variable
Wage bargaining
Complicated, as future hirings influence the bargaining game
Shocks to the worker’s bargaining power- may give rise to relatively big effects on current wages
Why not go for directed search and competitive search equilibrium?
Some missing references