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Macroeconomic Dynamics with Rigid Wage Contracts / Tobias Broer, Karl Harmenberg, Per Krusell, Erik Öberg.
- Format:
- Book
- Author/Creator:
- Broer, Tobías.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w29540.
- NBER working paper series no. w29540
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2021.
- Summary:
- We adapt the wage contracting structure in Chari (1983) to a dynamic, balanced-growth setting with re-contracting à la Calvo (1983). The resulting wage-rigidity framework delivers a model very similar to that in Jaimovich and Rebelo (2009), with their habit parameter replaced by our probability of wage-contract resetting. That is, if wage contracts can be reset very frequently, labor supply behaves in accordance with King, Plosser, and Rebelo (1988) preferences, whereas if they are sticky for a long time, we obtain the setting in Greenwood, Hercowitz, and Huffman (1988), thus allowing significant responses of hours to wage changes.
- Notes:
- Print version record
- December 2021.
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