Title of article
Labor marketdynamicsunderlong-termwagecontracting
Author/Authors
Leena Rudanko، نويسنده ,
Issue Information
روزنامه با شماره پیاپی سال 2008
Pages
14
From page
170
To page
183
Abstract
RecentresearchseekingtoexplainthestrongcyclicalityofUSunemployment
emphasizestheroleofwagerigidity.Thispaperproposesamicro-foundedmodelof
wagerigidity—an equilibriumbusinesscyclemodelofjobsearch,whereriskneutral
firmspostoptimallong-termcontractstoattractriskaverseworkers.Equilibrium
contractsfeaturewagesmoothing,limitedbytheinabilityofpartiestocommitto
contracts.Themodelisconsistentwithaggregatewagedataifneitherworkernorfirm
can commit,producingtoorigidwagesotherwise.Wagerigiditydoesnotleadtoa
substantialincreaseinthecyclicalvolatilityofunemployment
Keywords
WagerigidityUnemploymentfluctuationsLong-term wagecontractsLimited commitmentDirectedsearch
Journal title
Journal of Monetary Economics
Serial Year
2008
Journal title
Journal of Monetary Economics
Record number
846283
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