Nucci, Francesco; Riggi, Marianna - In: Journal of Economic Dynamics and Control 37 (2013) 12, pp. 2796-2813
A shift in the design of labor compensation occurred at around the mid-1980s in the U.S. and deals with an increased role of performance pay in driving the cyclical movements of wages. Using a DSGE model we show that this structural change accounts at least qualitatively for many observed...