The Role of Prevailing Prices and Wages in the Efficient Organization of Markets / Robert E. Hall.

Format:

Book

Author/Creator:

Hall, Robert E.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w0386.

NBER working paper series no. w0386

Language:

English

Subjects (All):

Wage-price policy.

Wage-price policy--History.

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1979.

Cambridge, Massachusetts : National Bureau of Economic Research, 1979.

Summary:

Among the ways a product or labor market might operate is the following: All firms quote the same price or wage. Customers or job-seekers search among sellers until they find one willing to sell them or employ them. They do not need to consider the possibility that another seller or employer might offer a better deal, since all offers are identical, under prevailing prices or wages, the small participants in the market -- customers and workers -- have very limited responsibilities for processing information. By contrast, where markets are equilibrated by conscious search for the best price or wage, the small participants face complex problems of gathering and interpreting information. Adherence to prevailing prices and wages may explain part of the macroeconomic puzzle of price and wage stickiness and the sensitivity of real variables to nominal disturbances.

Notes:

Print version record

August 1979.