The perspective of modern macroeconomic theory, be it new classical or old and new Keynesian, is that unemployment can be reduced only if real wages are cut. The modern Keynesians, basing themselves upon the microfoundations of efficiency wage theory, argue that real wages cannot and will not be...

Some of the fundamental tenets of conventional economic wisdom, which have had a profound impact on public policy, are challenged in this book. These precepts include the affirmation that low wages are more beneficial that high wages to the process of growth and development; convergence in terms...

According to standard neoclassical theory a higher real wage will result in less employment and a lower rate of employment growth than a lower real wage and thus exogenous interventions in the labor market which increase real wage, such as minimum wage legislation and unionization, are said to...

Research in the analytics of efficiency wage and x-efficiency theories is one of the focal points of behavioral economics. A fundamental assumption to these theories is that of effort discretion-that individuals have some control over both the quality and quantity dimensions of the effort they...