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Welfare costs of sticky wages when effort can respond

  • Bils, Mark
  • Chang, Yongsung

We examine the impact of wage stickiness when employment has an effort as well as hours dimension. Despite wages being predetermined, the labor market clears through the effort margin. Consequently, welfare costs of wage stickiness are potentially much, much smaller.

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Article provided by Elsevier in its journal Journal of Monetary Economics.

Volume (Year): 50 (2003)
Issue (Month): 2 (March)
Pages: 311-330

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Handle: RePEc:eee:moneco:v:50:y:2003:i:2:p:311-330
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505566

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