Monetary shocks with nominal wage stickiness and variable effort
Wallers (1989) model which incorporates an effort augmented production function into a traditional Keynesian analysis of supply and demand shocks is generalised by not restricting the elasticity of substitution between effort and employment to be unity. This significantly changes the results in that unanticipated monetary shocks will affect output and indexing real wages will increase the variation of output in response to supply shocks. Involuntary unemployment is not necessary for demand shocks to affect employment and output in this model.
|Date of creation:||Nov 2000|
|Contact details of provider:|| Postal: UCD, Belfield, Dublin 4|
Fax: +353-1-283 0068
Web page: http://www.ucd.ie/economics
More information through EDIRC
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.:
- Gray, Jo Anna, 1976. "Wage indexation: A macroeconomic approach," Journal of Monetary Economics, Elsevier, vol. 2(2), pages 221-235, April.
- Faria, Joao Ricardo, 2000. "Supervision and effort in an intertemporal efficiency wage model: the role of the Solow condition," Economics Letters, Elsevier, vol. 67(1), pages 93-98, April.
- Solow, Robert M., 1979. "Another possible source of wage stickiness," Journal of Macroeconomics, Elsevier, vol. 1(1), pages 79-82.
- Waller, Christopher J., 1989. "Efficiency wages, wage indexation and macroeconomic stabilization," Economics Letters, Elsevier, vol. 30(2), pages 125-128, August.
When requesting a correction, please mention this item's handle: RePEc:ucn:wpaper:200024. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Nicolas Clifton)
If references are entirely missing, you can add them using this form.