Review of Economic Studies Vol. 54 No. 3 1987
Search, Wage Bargains and Cycles
open access
Abstract
The author uses an equilibrium model of job matchings with a Nash wage equation to derive the response of wages and unemployment to productivity shock. By endogenizing labor's threat point, he shows that wages absorb fully permanent shocks but only partially temporary shocks. Hence, unemployment responds to perceived temporary shocks but not to permanent shocks.
- DOI
- 10.2307/2297570
- Volume
- 54
- Issue
- 3
- Pages
- 473
- Sources
- bibtex:phds-export.bib crossref openalex