A small interview survey was undertaken to see how actual wage-setters would react to the central ideas of several economic theories of wage stickiness. Wage cuts were surprisingly prevalent in recent years, despite the booming economy. The strongest finding was that managers believe that...

The authors argue that lumpy, nonconvex transaction costs are the norm for a wide range of economic decisions, which are thus characterized by inertial behavior. Application of this idea to the consumption of durable goods yields an (S,s) decision rule, which, when aggregated, highlights the...