Raurich, Xavier; Sorolla, Valeri - Facultat d'Economia i Empresa, Universitat de Barcelona - 2014
We introduce wage setting via efficiency wages in the neoclassical one-sector growth model to study the growth effects … economic variables will be different because wages are a state variable when wage inertia is introduced. In particular, we show … that the model with wage inertia can explain some growth patterns that cannot be explained when wages are flexible. We also …