lagged adjustment processes. In the context of estimated labor market systems for Germany, the UK, and the US, we construct … labor resources generated in the aftermath of a shock). Furthermore, we estimate the contributions of individual lagged …

We present a new theory of wage adjustment, based on worker loss aversion. In line with prospect theory, the workers … price. Firms adjust wages flexibly in response to variations in labor demand. The resulting theory of wage adjustment is …

cycle model. In particular, we analyze the effect of a monetary policy shock and investigate how labor market frictions … persistent movements of aggregate inflation. Moreover, the impact of a monetary policy shock on unemployment and inflation …

market with wage rigidities may not recover from such a temporary labor supply shock: with a younger and less experienced … even after the shock. In a competitive market, in contrast, wage inequality and notably, the wage return to experience … becomes higher but there is no persistence of the supply shock. Higher education prevents this intertemporal multiplication of …