Karabarbounis, Loukas - In: Review of Economic Dynamics 17 (2014) 2, pp. 206-223
Do fluctuations of the labor wedge, defined as the gap between the firm's marginal product of labor (MPN) and the …, fluctuations of the labor wedge predominantly reflect fluctuations of the gap between the real wage and the MRS. As a result …, business cycle theories of the labor wedge should primarily focus on improving the household side of the labor market …