Since the early 1980s, the U.S. economy has experienced a growing wage differential: high-skilled workers have claimed an increasing share of available income, while low-skilled workers have seen an absolute decline in real wages. How and why this disparity has arisen is a matter of ongoing...

A political miracle occurred when Germany was reunited, and at first glance an economic miracle has followed. Real incomes in the east have now reached the western level, and investment per capita has been much higher than in the west. However, every third deutschmark spent in the east has been...

The paper develops a simple stochastic new open economy macroeconomic model based on sticky nominal wages. Explicit solution of the wage-setting problem under uncertainty allows one to analyze the effects of the monetary regime on welfare, expected output, and the expected terms of trade....

Poor countries must specialize in standardized. labor-intensive commodities. Middle income countries may have a richer menu of options available to them if their labor force is reasonably well-educated and skilled. This paper is motivated by the possibility that there may exist multiple...

Wage inequality in Sweden declined precipitously during the 1960s and the 1970s. There was a sharp reduction in overall wage dispersion and in the relative earnings advantage of highly-educated workers, a marked narrowing of wage differences between men and women, and a trend increase in youth...

Wage and price controls have a long and somewhat disreputable history, presumably because of their frequent use in many countries as short run substitutes for measure~ with more lasting effects on the inflation rate. But, in 1985 and 1986, Argentina, Brazil, and Israel used extensive wage-price...

In 1985-86 Argentina, Brazil and Israel initiated programs of stabilization after episodes of high and sharply accelerating inflation. Among the key features of each stabilization program were the use of wage- price controls, a fixed exchange rate and fiscal correction as well as a significant...

This paper analyzes two simple wage rules that keep employment constant when there are shocks to the prices of imported materials. One rule ties nominal wages to the GNP deflator rather than the consumer price index. The second rule, followed by Japan after the second oil price shock, ties the...

Neglected, but significant, the long-run consequence of the minimum wage - which was made national policy in the United States in 1938 - is its stimulation of capital deepening. This took two forms. First, the engineered shortage of low-skill, low-paying jobs induced teenagers to invest in...

When wage contracts are relatively short-lived, rent sharing may reduce the incentives for investment since some of the returns to sunk capital are captured by workers. In this paper we use a matched worker-firm data set from the Veneto region of Italy that combines Social Security earnings...