To what extent can the persistence of very high unemployment rates in most of the European countries be attributed to the presence of high real interest rates ? This question, essentially addressed by the ‘customer market’ price)setting school, was very much debated in Europe these last...

We extend the benchmark RBC model amending the technology for efficiency wage considerations. The disutility of effort depends on current, alternative and past wages. Past wages are treated as the worker's past wages (personal norm case) or as the past wages of the society (social norm case)....

We present an efficiency wage model in which workers' effort depends on the level and on the growth rate of their wage relative to an alternative wage. Using data for four countries (US, UK, FR, GY), the implications of the model are examined and are found to be in accordance with the...

Past experiences and social forces have been incorporated into tastes in order to analyze various microeconomic issues. We use these extended preferences to model the making of standard-of-living aspirations and study their effect on macroeconomic variables. We concentrate first on consumption...

We present a dynamic non-linear model for an efficient contracting between a firm facing adjustment costs on labour and a union having preferences which are subject to habit formation. The model’s first order necessary conditions are estimated for the French, the Dutch and the Belgian labour...