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Many economists suspect that downward nominal wage rigidities in ongoing labor contracts are an important source of … compares three occupations in the housing sector with very different wage setting institutions, real estate agents, architects … labor demand shocks to the industry. The employment of real estate agents, whose pay is far more flexible than the other …
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The Mortensen and Pissarides (1994) matching model with all wages negotiated each period is shown inconsistent with macroeconomic wage dynamics in the US. This applies even when heterogeneous match productivities, time to build vacancies and credible bargaining are incorporated. Wage rigidity...
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