| Finance and Economics Discussion Series |
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Efficiency Wages, Nominal Rigidities, and the Cyclical Behavior of Real Wages and Marginal Cost Michael T. Kiley 1997-24 |
Abstract: This paper presents a model in which efficiency wages generate
acyclical real wages but do not lower the sensitivity of marginal cost
to output or increase price stickiness. Consideration of previous
models suggests that efficiency wages are a poor source of real
rigidity.
Full paper (20 KB PDF)
| Full paper (53 KB Postscript)
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Last update: July 16, 1997