Optimal Labor Contracts, Imperfect Competition and Underemployment Equilibria: A Framework for Analysis
This paper examines the macroeconomic properties of imperfectly competitive economies. The focus is on the coordination failures that might arise in these economies, a study of alternative policies and the comparative static properties of these models. This paper differs from others in this area by modeling the labor market from the perspective of optimal contract theory. This permits an evaluation of the role of labor market behavior in producing these coordination failures and a study of labor market policies (such as unemployment insurance and alternative compensation schemes).
|Date of creation:||Oct 1986|
|Date of revision:|
|Publication status:||published as Canadian Journal of Economics, 1989.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
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