Wages are an element of cost crucially aecting the competitiveness of individual firms. But the wage bill is also a … market regularities and (ii) macroeconomic dynamics (long-term rates of growth, GDP uctuations, unemployment rates …

Using a dynamic efficiency wage model, where a Phillips curve appears because worker morale depends on the unemployment … rate and a change in nominal wages, we analyze the effects of fiscal and monetary expansions and of an employment subsidy … on unemployment in two steady states. In one steady state, only structural unemployment occurs. In the other, not only …