Article ID Journal Published Year Pages File Type
5062776 Economics Letters 2006 7 Pages PDF
Abstract

The missing wage rigidity in general equilibrium models of efficiency wages is an artifact of the external wage reference definition usually adopted. Efficiency wage models with a wage reference depending on the firm's ability to pay generate strong wage rigidity.

Keywords
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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Efficiency wages revisited: The internal reference perspective
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