Campbell, Carl (2011): Efficiency wage setting, labor demand, and Phillips curve microfoundations.
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This study demonstrates that a model with efficiency wages and imperfect information produces a Phillips curve relationship. Equations are derived for labor demand and the efficiency wage-setting condition, and shifts in these curves in response to aggregate demand shocks result in a relationship with the characteristics of a Phillips curve. The Phillips curve differs from the efficiency wage-setting condition in that the Phillips curve is a more parsimonious expression and has a coefficient on expected inflation equal to 1. Also derived from this model is the counterpart curve to the Phillips curve in unemployment – inflation space.
|Item Type:||MPRA Paper|
|Original Title:||Efficiency wage setting, labor demand, and Phillips curve microfoundations|
|Keywords:||Phillips curve; Efficiency wages; Imperfect information|
|Subjects:||E - Macroeconomics and Monetary Economics > E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment > E24 - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital
E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E31 - Price Level; Inflation; Deflation
|Depositing User:||Carl M. Campbell|
|Date Deposited:||14. Oct 2011 22:33|
|Last Modified:||11. Feb 2013 17:10|
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