Efficiency Wages, Nominal Rigidities, and the Cyclical Behavior of Real Wages and Marginal Cost

FRB Finance and Econ. Disc. Series #97-24

11 Pages Posted: 7 Nov 1997

See all articles by Michael T. Kiley

Michael T. Kiley

Board of Governors of the Federal Reserve System

Date Written: April 25, 1997

Abstract

I present a model in which efficiency wages generate acyclical real wages but do not lower the sensitivity of marginal cost to output or increase price stickiness. Consideration of previous models suggests that efficiency wages are a poor real rigidity.

JEL Classification: E24, E31, E32

Suggested Citation

Kiley, Michael T., Efficiency Wages, Nominal Rigidities, and the Cyclical Behavior of Real Wages and Marginal Cost (April 25, 1997). FRB Finance and Econ. Disc. Series #97-24. Available at SSRN: https://ssrn.com/abstract=35174 or http://dx.doi.org/10.2139/ssrn.35174

Michael T. Kiley (Contact Author)

Board of Governors of the Federal Reserve System ( email )

20th and C Streets, NW
Washington, DC 20551
United States
202-452-2448 (Phone)
202-452-5296 (Fax)

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