Monetary shocks with variable effort

In a model with rigid nominal wages, full information and competitive product markets, I show that when an effort augmented production function is incorporated into an analysis of supply and demand shocks, the outcomes are in line with traditional Keynesian analysis for a wide range of parameter values. Monetary shocks can increase output and employment.

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Year of publication:	2005-03
Authors:	Walsh, Frank
Institutions:	School of Economics, University College Dublin
Subject:	Sticky nominal wage \| Efficiency wages \| Efficiency wage theory \| Labor market

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Extent:	application/pdf
Series:	Open Access publications.
Type of publication:	Book / Working Paper
Notes:	Published in: Journal of Macroeconomics, 27(1) 2005-03 9 pages
Classification:	E12 - Keynes; Keynesian; Post-Keynesian ; E24 - Employment; Unemployment; Wages ; J41 - Contracts: Specific Human Capital, Matching Models, Efficiency Wage Models, and Internal Labor Markets
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011269373