In a setting with dispersed information, monopolistic competition and sticky-prices, a policy authority uncertain about the monetary transmission mechanism reacts prudently to supply shocks. This induces producers to ascribe an excessive importance to their private information when setting...

In a setting that focuses on efficient dynamic hours-workers substitution we show that contingent worksharing contributes to workers retention during bad business spells and to sustained hiring during good spells. As a consequence, average employment increases on both accounts. We also show that...

In a dynamic stochastic monopoly union model we show that firing costs have a small and ambiguous impact on the level of employment if the union precommits to future wages. Further, in comparison with the commitment equilibrium and for very general union preferences, the no-commitment...