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Sticky-Wage Models and Knowledge Capital: A Note

Author

Listed:
  • Kevin x.d. Huang

    () (Vanderbilt University)

  • Munechika Katayama

    () (Waseda University)

  • Mototsugu Shintani

    () (University of Tokyo and Vanderbilt University)

  • Takayuki Tsuruga

    () (Kyoto University)

Abstract

We present a sticky-wage model with two types of labors: while a worker's labor contributes to current production, a researcher's work helps develop new ideas to add to a firm's knowledge capital that enhances its productivity for many periods. The long-lived effect of knowledge capital on productivity is analogous to the long-lasting effect of consumer durables on utility in the sticky-price model of Barsky, House and Kimball (2007). We show, however, that the relative role of the pricing of the two production inputs analogous to consumption durables and nondurables in BHK's sticky-price model is completely switched in our sticky-wage model.

Suggested Citation

  • Kevin x.d. Huang & Munechika Katayama & Mototsugu Shintani & Takayuki Tsuruga, 2017. "Sticky-Wage Models and Knowledge Capital: A Note," Vanderbilt University Department of Economics Working Papers 17-00006, Vanderbilt University Department of Economics.
  • Handle: RePEc:van:wpaper:vuecon-sub-17-00006
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    References listed on IDEAS

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    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • C0 - Mathematical and Quantitative Methods - - General

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