We first build a fair wage model in which effort varies over the business cycle. This mechanism decreases the need for other sources of sluggishness to explain the observed high inflation persistence. Second, we confront empirically our fair wage model with a New Keynesian model based on the...

We first build a fair wage model in which effort varies over the business cycle. This mechanism decreases the need for other sources of sluggishness to explain the observed high inflation persistence. Second, we confront empirically our fair wage model with a New Keynesian model based on the...

The aim of this article is to show that RBC models can account for the so-called Phillips curve. We propose an efficiency wage model in which money is introduced via a cash-in-advance constraint. Households choose how much effort to devote by comparing present real and nominal wages with past...

We analyze to what extent skill heterogeneity in the labor market with different wage formation mechanisms can explain the features of the Spanish labor market. The model assumes two types of workers with differences in skills. Skilled labor sets wages in an efficiency way while unskilled labor...

We first build a fair wage model in which effort varies over the business cycle. This mechanism decreases the need for other sources of sluggishness to explain the observed high inflation persistence. Second, we confront empirically our fair wage model with a New Keynesian model based on the...

We first build a fair wage model in which effort varies over the business cycle. This mechanism decreases the need for other sources of sluggishness to explain the observed high inflation persistence. Second, we confront empirically our fair wage model with a New Keynesian model based on the...