Despite widespread recognition that high interest rates may cause price increases through their influence on costs, this point has not been incorporated into simple aggregative macro models. We suggest a way of modifying the simple macro model to incorporate this effect, and by using reasonable...

Blinder has suggested that wages be partially tied to a firm's own price change, so that the key feature behind Weitzman's profit-sharing proposal might be created without the same need for fundamental institutional change. We examine whether this proposal for labor's remuneration yields the...