This chapter discusses facts and theories related to cyclic fluctuations in the labor market. Employment in the United States shows important cyclical fluctuations, both in the amount of work performed by workers on their jobs and in the fraction of the population holding jobs. Macro and labor...

Much recent thought has been devoted to the macroeconomic importance of the existence of wage contracts. Still, some puzzling features of the most conspicuous form of wage bargaining, that done formally by employers and labor unions, deserve further theoretical attention. Among these important...

"In a market-clearing economy, declines in demand from one sector do not cause large declines in aggregatge output because other sectors expand. The key price mediating the response is the interest rate. A decline in the rate stimulates all categories of spending. But in a low-inflation economy,...