unemployment. We show that the socially efficient incentive power of the equilibrium wage contract is constrained in the absence of … unemployment benefits. We then apply the model to explain the recent increase in performance-pay contracts. Within our model, this … factors is an increase in the equilibrium unemployment rate. …

leads to constantly rising unemployment and tax rates. The resulting crisis may trigger new insights into economic …

unemployment. Moreover, the wage sweep-ups caused by nominal rigidity are strongly correlated with unemployment suggesting that … downward rigidity of nominal wages indeed contributes to unemployment. …

which there are multiple equilibrium unemployment rates. The model has two equations in common with the new-Keynesian model …

Central banks throughout the world predict inflation with new-Keynesian models where, after a shock, the unemployment …