Jansen, Marcel; Costain, James - Society for Economic Dynamics - SED - 2004
observed in the data. These papers have suggested that rigid wages may help to resolve this puzzle. However, little progress … avoid shirking, firms therefore prefer to pay their workers incentive compatible wages. Jansen (2001) showed that in this … the wage and therefore smoothing unemployment fluctuations (Kimball 1994). In a matching model, too, wages fall in …