Campbell, Carl (2011): Efficiency wage setting, labor demand, and Phillips curve microfoundations.
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Abstract
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 |
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Original Title: | Efficiency wage setting, labor demand, and Phillips curve microfoundations |
Language: | English |
Keywords: | Phillips curve; Efficiency wages; Imperfect information |
Subjects: | E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E24 - Employment ; Unemployment ; Wages ; Intergenerational Income Distribution ; Aggregate Human Capital ; Aggregate Labor Productivity E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E31 - Price Level ; Inflation ; Deflation |
Item ID: | 34121 |
Depositing User: | Carl M. Campbell |
Date Deposited: | 14 Oct 2011 22:33 |
Last Modified: | 28 Sep 2019 19:21 |
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URI: | https://mpra.ub.uni-muenchen.de/id/eprint/34121 |
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