Some Evidence on Demand Fluctuations and the Increased Stability of the Post-war American Economy
AbstractThis paper investigates the implications of a sticky-wage contracting model that can explain both the decline in wage and price flexibility and the increased stability of the postwar American economy. The reduction in the size of demand shocks in the postwar period has increased agents' incentives to write longer contracts. Though longer contracts have rendered real activity more responsive to demand shocks in the postwar period, the reduction in the size of these shocks has dominated the increase in the size of response to a particular shock. Overall, real activity has become more stable in the postwar period, as predicted by theory.
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Bibliographic InfoArticle provided by Canadian Economics Association in its journal Canadian Journal of Economics.
Volume (Year): 25 (1992)
Issue (Month): 4 (November)
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Postal: Canadian Economics Association Prof. Steven Ambler, Secretary-Treasurer c/o Olivier Lebert, CEA/CJE/CPP Office C.P. 35006, 1221 Fleury Est Montréal, Québec, Canada H2C 3K4
Web page: http://economics.ca/cje/
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- Magda Kandil, 2002. "Asymmetry In Economic Fluctuations In The Us Economy: The Pre-War And The 1946-1991 Periods Compared," International Economic Journal, Korean International Economic Association, vol. 16(1), pages 21-42.
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