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This paper examines the effect of skill-biased technological change on the structure of wages, the composition of …
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prices. How should the structure of sectorial wages adjust in response to such a shock? This question is addressed in the … are affected by the exogenous real shock. Cost of negotiations result in labor market contracts which set nominal wages in …-indexation rules. The optimal rules alter both the absolute and the relative structure of sectorial nominal wages. We examine the …
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This paper investigates an economy in which there are short-term wage contracts that are re-negotiated under certain conditions. This paper determines the optimal frequency of wage re-negotiation and shows that it depends positively on measures of aggregate variability and Phillips curve slope....
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