Contract-Theoretic Approaches to Wages and Displacement
Document Type
Discussion Paper
Publication Date
4-1-1999
CFDP Number
1216
CFDP Pages
27
Abstract
This paper develops a theoretical framework for analyzing contracting imperfections in long-term employment relationships. We focus chiefly on limited enforceability and limited worker liquidity. Inefficient severance of employment relationships, payment of efficiency wages, the relative responses of wages and employment to business cycle shocks, and the propagation of these shocks are linked to the nature of contracting imperfections.
Recommended Citation
den Haan, Wouter J.; Ramey, Garey; and Watson, Joel, "Contract-Theoretic Approaches to Wages and Displacement" (1999). Cowles Foundation Discussion Papers. 1464.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/1464