The objective of this paper is to provide an optimizing model of wage and price setting consistent with U.S. data. The paper first investigates the predictions of an optimizing labor supply model for the aggregate nominal wage, taking as given the evolution of prices and quantities. In this part...

Several features of the U.S. natural rate of unemployment are reconsidered through specification and testing of econometric models. Traditionally, the choice has been between a wage Phillips curve model, PCM, or an equilibrium correction wage curve model, WECM. The models proposed in this paper...

Wage Dispersion and Efficiency. It is often assumed that markets generate efficient allocations, but these are not necessarily fair. The widening of wage differentials that is currently observed is interpreted in this manner: Skill-biased technological progress increases demand for skilled work...

The occupational skill structure depends on the business cycle if employers respond to shortages of applicants during upturns by lowering their hiring standards. The notion and relevance of hiring standards adjustment was advanced by Reder and investigated formally in a search-theoretic...

The occupational skill structure depends on the business cycle if employers respond to shortages of applicants during upturns by lowering their hiring standards. Devereux uses this implication to construct empirical tests for the notion of hiring standards adjustment (the so-called Reder...

Die berufliche Qualifikationsstruktur ist konjunkturabhängig, wenn Arbeitgeber ein zu geringes Angebot von Arbeitskräften mit einer Senkung der Einstellungs- und Qualifikationsstandards beantworten. Die Bedeutung von Einstellungsstandards für Anpassungsprozesse auf dem Arbeitsmarkt wurde von...

A firm that faces insufficient supply of labor can either increase the wage offer to attract more applicants, or reduce the hiring standard to enlarge the pool of potential employees, or do both. This simultaneous adjustment of wages and hiring standards has been emphasized in a classical...