Moscarini, Giuseppe; Postel-Vinay, Fabien - In: Review of Economic Studies 80 (2013) 4, pp. 1545-1581
We study equilibrium wage and employment dynamics in a class of popular search models with wage posting, in the presence of aggregate productivity shocks. Firms offer and commit to (Markov) contracts, which specify a wage contingent on all payoff-relevant states, but must pay equally all of...