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The Macroeconomic Consequences of Reciprocity in Labor Relations

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Author Info
Jean-Pierre Danthine
André Kurmann

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Abstract

We develop and analyze a structural model of efficiency wages founded on reciprocity. Workers are assumed to face an explicit trade-off between the disutility of providing effort and the psychological benefit of reciprocating the gift of a wage offer above some reference level. The model provides a rationale for rent sharing-a feature that is very much present in the data but absent from previous formulations of the efficiency wage hypothesis. This firm-internal perspective on efficiency wages has potentially important macroeconomic consequences: rent-sharing considerations promote wage rigidity, internal amplification and differential responses to technology and demand shocks. Copyright The editors of the "Scandinavian Journal of Economics" 2008 .

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1467-9442.2007.00518.x
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Publisher Info
Article provided by Blackwell Publishing in its journal Scandinavian Journal of Economics.

Volume (Year): 109 (2008)
Issue (Month): 4 (03)
Pages: 857-881
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Handle: RePEc:bla:scandj:v:109:y:2008:i:4:p:857-881

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  31. Jean-Pierre Danthine & Andre Kurmann, 2004. "Fair Wages in a New Keynesian Model of the Business Cycle," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 7(1), pages 107-142, January. [Downloadable!] (restricted)
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Francesco Busato & William Addessi, 2007. "Labor Unions and Asset Prices," Economics Working Papers 2007-05, School of Economics and Management, University of Aarhus. [Downloadable!]
  2. Ansgar, Rannenberg, 2009. "Disinflation and the NAIRU in a New-Keynesian New-Growth Model (Extended Version)," MPRA Paper 13610, University Library of Munich, Germany. [Downloadable!]
  3. Jean-Pierre Danthine & André Kurmann, 2007. "The Business Cycle Implications of Reciprocity in Labor Relations," Cahiers de recherche 0743, CIRPEE. [Downloadable!]
    Other versions:
  4. Ansgar Rannenberg, 2009. " Shocks, Monetary Policy and Institutions: Explaining Unemployment Persistence in "Europe" and the United States," CDMA Working Paper Series 0903, Centre for Dynamic Macroeconomic Analysis. [Downloadable!]
  5. Erkki Koskela & Ronnie Schöb, 2009. "A note on internal and external reference in efficiency wage models," Journal of Economics, Springer, vol. 96(1), pages 79-86, January. [Downloadable!] (restricted)
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