the special case in which prices are sticky and wages are perfectly flexible. When the model is calibrated to exhibit an …

This paper develops a simple framework for examining human capital accumulation, unemployment, and relative wages in a …

nominal wages. This finding contrasts with results obtained using standard sticky-wage models, which employ Walrasian labor … tolerate large fluctuations in real wages that would otherwise not be tolerated in a standard model with Walrasian labor … markets; as a result, any concern for stabilizing nominal wages does not translate into a concern for stabilizing nominal …

-optimal equilibrium that would occur under completely flexible wages and prices; that is, the model exhibits a tradeoff between … stabilizing the output gap, price inflation, and wage inflation. The Pareto optimum is attainable only if either wages or prices …