Some Evidence on Demand Fluctuations and the Increased Stability of the Post-war American Economy

Magda Kandil

Canadian Journal of Economics, 1992, vol. 25, issue 4, 839-64

Abstract: This paper investigates the implications of a sticky-wage contracting model that can explain both the decline in wage and price flexibility and the increased stability of the postwar American economy. The reduction in the size of demand shocks in the postwar period has increased agents' incentives to write longer contracts. Though longer contracts have rendered real activity more responsive to demand shocks in the postwar period, the reduction in the size of these shocks has dominated the increase in the size of response to a particular shock. Overall, real activity has become more stable in the postwar period, as predicted by theory.

Date: 1992
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://links.jstor.org/sici?sici=0008-4085%2819921 ... EODFA%3E2.0.CO%3B2-V (text/html)
only available to JSTOR subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cje:issued:v:25:y:1992:i:4:p:839-64

Ordering information: This journal article can be ordered from
https://www.economic ... ionen/membership.php

Access Statistics for this article

Canadian Journal of Economics is currently edited by Zhiqi Chen

More articles in Canadian Journal of Economics from Canadian Economics Association Canadian Economics Association Prof. Werrner Antweiler, Treasurer UBC Sauder School of Business 2053 Main Mall Vancouver, BC, V6T 1Z2. Contact information at EDIRC.
Bibliographic data for series maintained by Prof. Werner Antweiler ().