Boeri, Tito (contributor); Burda, Michael C. (contributor) - 2008
agreement do not close, but rather revert to decentralised
wage setting; equilibrium in our economy is a hybrid mix of rigid and … equilibrium of this economy is such that
no workers or firms have an interest in changing their wage-setting regime.
Section 3 … labour
markets
s
f
=
b
1−
³
1−
λ(r+λ)T
2(1−β)(λ+rβ)
´
(λ+rβ)T
1−β
in the flexible economy, and
s
r
=
w
1−
³
1−
(r+λ)T
2
´
λT …