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

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

This paper explores the influence of wage and price staggering on monetary persistence. First, our analysis indicates … that the degree of monetary persistence generated by wage vis-à-vis price staggering depends on the relative … persistence than price staggering does not necessarily hold. Second, this paper discusses weaknesses of the "contract multiplier …

This paper explores the influence of wage and price staggering on monetary persistence. We show that, for plausible … parameter values, wage and price staggering are complementary in generating monetary persistence. We do so by proposing the new … persistence. The existence of complementarities means that beyond understanding how wage and price staggering work in isolation …

reaction theory of unemployment, which focuses on (a) the interaction among labor market adjustment processes, (b) the … the adjustment processes and economic growth. We divide the shocks into institutional variables, price variables, and … responses to each shock. Our analysis permits us to distinguish between the short- and longrun effects of the shocks. Different …