Dynamic of Employment and Wages Incentives
AbstractThis paper studies a dynamic model with efficiency wages and adjustment costs associated with hiring and firing decisions. With linear adjustment costs, the optimal efficiency wage and employment are affected by the real interest rate and adjustment costs. When lumpy costs or convex adjustment costs (symmetric or asymmetric) are taken into account, the interest rate and the adjustment costs do not play any role in determining the equilibrium efficiency wage and level of employment.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 17183.
Date of creation: 08 Sep 2009
Date of revision:
Wage determination; Jobs creation;
Find related papers by JEL classification:
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-09-19 (All new papers)
- NEP-BEC-2009-09-19 (Business Economics)
- NEP-DGE-2009-09-19 (Dynamic General Equilibrium)
- NEP-LAB-2009-09-19 (Labour Economics)
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