We introduce dynamic incentive contracts into a model of unemployment dynamics and present three results. First, wage …-order equivalent in an economy with flexible incentive pay and without bargaining, vis-á-vis an economy with rigid wages. Second, wage …% of wage cyclicality in the data arises from incentives. A standard model without incentives calibrated to weakly …

write wage contracts. We develop a constructive proof for the nonparametric identification of the model primitives from … matched employer-employee data. We use the estimated model to decompose the sources of wage dispersion into worker …

relationship across US states between local employment and wage growth during the Great Recession. This relationship is much weaker … during the Great Recession, but the wage stickiness necessary for them to account for the slow employment recovery and the … that our methodology yields different conclusions about the causes of aggregate employment and wage dynamics between 2007 …

are downward nominal wage rigidity, a Taylor-type interest-rate feedback rule, the zero bound on nominal rates, and a …

This paper examines the ability of a simple stylized general equilibrium model that incorporates nominal wage rigidity … support for the hypothesis that a monetary contraction operating through a sticky wage channel played a significant role in … the price decline having a much larger unanticipated component during the Depression, as well as less flexible wage …