DE LA CROIX, David; DE WALQUE, Gregory; WOUTERS, Rafael - Center for Operations Research and Econometrics (CORE), … - 2006
We first build a fair wage model in which effort varies over the business cycle. This mechanism decreases the need for other sources of sluggishness to explain the observed high inflation persistence. Second, we confront empirically our fairwage model with a New Keynesian model based on the...