Pareto Inefficiency of Market Economies: Search and Efficiency Wage Models
AbstractThis paper shows that market economies with search and in which wages are affected by efficiency wage considerations are not constrained Pareto efficient. Wages are not set at Pareto efficient levels, nor is the level of employment (unemployment) Pareto efficient. We identify the nature of the biases and the welfare improving government interventions.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 2651.
Date of creation: Apr 1989
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Other versions of this item:
- Greenwald, Bruce & Stiglitz, Joseph E, 1988. "Pareto Inefficiency of Market Economies: Search and Efficiency Wage Models," American Economic Review, American Economic Association, vol. 78(2), pages 351-55, May.
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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