Contract-Theoretic Approaches to Wages and Displacement

29 Pages Posted: 22 Jun 1999 Last revised: 20 Jan 2022

See all articles by Wouter J. den Haan

Wouter J. den Haan

University of Amsterdam; Centre for Economic Policy Research (CEPR); Tinbergen Institute

Garey Ramey

University of California, San Diego (UCSD) - Department of Economics

Joel Watson

University of California, San Diego (UCSD) - Department of Economics

Date Written: February 1999

Abstract

This paper develops a theoretical framework for analyzing contracting imperfections in long-term employment relationships. We focus chiefly on limited enforceability and limited worker liquidity. Inefficient severance of employment relationships, payment of efficiency wages, the relative response of wages and employment to business cycle shocks, and the propagation of these shocks are linked to the nature of contracting imperfections.

Suggested Citation

Den Haan, Wouter J. and Ramey, Garey and Watson, Joel, Contract-Theoretic Approaches to Wages and Displacement (February 1999). NBER Working Paper No. w6972, Available at SSRN: https://ssrn.com/abstract=151633

Wouter J. Den Haan (Contact Author)

University of Amsterdam ( email )

Spui 21
Amsterdam, 1018 WB
Netherlands

HOME PAGE: http://www1.feb.uva.nl/toe/content/people/content/denhaan/pers.htm

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Garey Ramey

University of California, San Diego (UCSD) - Department of Economics ( email )

9500 Gilman Drive
La Jolla, CA 92093-0508
United States
858-534-5721 (Phone)
858-534-7040 (Fax)

Joel Watson

University of California, San Diego (UCSD) - Department of Economics ( email )

9500 Gilman Drive
La Jolla, CA 92093-0508
United States
858-534-6132 (Phone)
619-534-7040 (Fax)

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