This paper examines the response of real wages and employment probabilities to nominal shocks using micro-panel data from the National Longitudinal Survey of Young Men. Both economy-wide and sector-specific responses to nominal shocks are examined. The observed response patterns are inconsistent...

The paper employs three different types of identifying restrictions to calculate the impulse responses for the trivariate series composed of the U.S. unemployment level, real GNP and the money stock. The first two are the zero restrictions, arising from the assumption of the delayed information...

This paper examines the response of sectoral real wages and location probabilities to oil price shocks using U.S. micro-panel data (the National Longitudinal Survey of Young Men). The goal is to determine whether the observed response patterns are consistent with so-called “sectoral shift”...

Search theory routinely assumes that decisions about the acceptance/rejection of job offers (and, hence, about labor market movements between jobs or across employment states) are made by individuals acting in isolation. In reality, the vast majority of workers are somewhat tied to their...

Economic development is typically accompanied by a very pronounced migration of labor from rural to urban employment. This migration, in turn, is often associated with large scale urban underemployment. Both factors appear to play a very prominent role in the process of development. We consider...

We propose a definition of involuntary unemployment which differs from that traditionally used in implicit labor contract theory. We say that a worker is involuntarily unemployed if the marginal wage implied by the optimal contract exceeds the marginal rate of substitution between leisure and...

Between 1913 and 1929, real GDP per person in the UK fell 1 percent, while this same measure of economic activity rose about 25 percent in the rest of the world. Why was Britain so depressed in a decade of strong economic activity around the world? This paper argues that the standard...

Larry Ball’s paper contains two basic ideas. The first is a second generation Phillips Curve which relates changes in inflation to the level of the unemployment rate and the second is the idea that monetary policy has extremely persistent effects on the unemployment rate, well beyond effects...