relative-wage norms as a central element of wage formation. Norms change endogenously, leading to path dependence (hysteresis …) in the stationary solution for the employment share of the modern sector. The effects of shocks - the sensitivity of the … long-run outcome to initial conditions - may be amplified by non-linearities in the adjustment of wages to deviations of …

-labor policies and growth on one hand, and long-run employment on the other; (c) are consistent with the evidence on the distributive …

, which resembles a rudimentary first approximation to an accelerator, and of a hysteresis effect in wage formation in turn …

How do wages respond to financial recessions? Based on a dynamic macroeconomic model with frictions in the labor and … and explore their effect on wages. First, the financial labor wedge reduces wages. Second, financial constraints may … interact with aggregate labor market conditions in various ways putting upward or downward pressure on wages. We test partial …

We document two striking facts about U.S. firm dynamics and interpret their significance for aggregate employment … gradual shift of employment from younger to older firms over the same period. Both observations hold across industries and … unchanged. Consequently, the reallocation of employment toward older firms results entirely from the cumulative effect of the …