economic conditions at the time of hiring on future wages. Measured by the labor's user cost, the price of labor is …

decrease the volatility of real wages, ceteris paribus. For a sample of 14 OECD countries over the period 1985-2005, the gross …

-sectional heterogeneity of establishments' average real wages over the business cycle. While the median establishments' real wages are … procyclical, there is a large fraction of establishments with countercyclical real wages. We are the first to show that … establishments with more procyclical wages have a less procyclical hires rate and employment behavior. We propose a labor market flow …

: flexibility of wages for new hires and pro-cyclicality of the opportunity cost of employment. Calibrated to U.S. data, the model …I propose a new mechanism for sluggish wages based on workers' noisy information about the state of the economy. Wages … higher wages. This increases firms' incentives to post more vacancies, which makes unemployment volatile and sensitive to …

vs. sticky wages, interactions at the firm level between price and wage-setting, alternative forms of hiring frictions … little real rigidity and, so, too volatile inflation, owing to strong responses of marginal wages and hours per employee … the responses of wages, inflation and employment …

contracts offer severance compensation and sometimes give notice before dismissal. Severance compensation smoothes consumption … exogenous unemployment compensation is sufficiently generous. …