The paper examines the effects of macro-economic policy on poverty when the labour market is subject to partial wage rigidity. It shows that the orothodox assumption of a perfect labour market ignores a number of important conflicts arising from macro-economic policy. Specifically, it...

Whilst existing efficiency wage literature assumes detection probabilities of shirkers are exogenous, this paper finds them positively and endogenously dependent on non-shirkers' effort. It shares the result with the endogenous monitoring models where, in some regions, workers reduce effort in...