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
Date Written: April 25, 1997
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: Suggested Citation