Gaur, Meghana; Grigsby, John; Hazell, Jonathon; Ndiaye, … - 2024
to that of economies with rigid wages. Likewise, the slope of the Phillips curve is the same in both economies. This … equivalence is due to effort fluctuations, which render effective marginal costs rigid even if wages are flexible. Our calibrated … bargaining and outside options. A standard model without incentives calibrated to weakly procyclical wages matches the impulse …