Real and Nominal Wage Rigidity in a Model of Equal-Treatment Contracting

Jonathan Thomas and Andy Snell

CDMA Conference Paper Series from Centre for Dynamic Macroeconomic Analysis

Abstract: This paper analyses a model with downward rigidities in which firms cannot pay discriminate based on year of entry to a firm, and develops an equilibrium model of wages and unemployment. We solve for the dynamics of wages and unemployment under conditions of downward wage rigidity, where forward looking firms take into account these constraints. Using simulated productivity data based on the post-war US economy, we analyse the ability of the model to match certain stylised labour market facts.

Keywords: Labour contracts; business cycle; unemployment; equal treatment; downward rigidity; cross-contract restrictions. (search for similar items in EconPapers)
JEL-codes: E32 J41 (search for similar items in EconPapers)
Date: 2007-11
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Working Paper: Real and Nominal Wage Rigidity in a Model of Equal-Treatment Contracting (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:san:cdmacp:0708

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