The Implicit Contract Theory of Unemployment Meets the Wage Bill Argument PDF Download

Author: G. A. Akerlof
Publisher:
ISBN:
Category :
Languages : en
Pages :

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Author: Oliver Fabel
Publisher:
ISBN:
Category : Equilibrium (Economics)
Languages : en
Pages : 284

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Author: Sherwin Rosen
Publisher: Edward Elgar Publishing
ISBN:
Category : Business & Economics
Languages : en
Pages : 504

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This volume brings together the most innovative and important work on implicit contract theory, a key area of research which has developed over the past 20 years. Implicit contract theory is concerned with the workings of the macro-labour market over business cycles and focuses on a series of key questions including, how economists can explain unemployment levels and employment fluctuations during recessions in terms of rational economic behaviour, and, why wages do not fall to clear the market.

Author: Truman F. BEWLEY
Publisher: Harvard University Press
ISBN: 0674020901
Category : Business & Economics
Languages : en
Pages : 538

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A deep question in economics is why wages and salaries don't fall during recessions. This is not true of other prices, which adjust relatively quickly to reflect changes in demand and supply. Although economists have posited many theories to account for wage rigidity, none is satisfactory. Eschewing "top-down" theorizing, Truman Bewley explored the puzzle by interviewing--during the recession of the early 1990s--over three hundred business executives and labor leaders as well as professional recruiters and advisors to the unemployed. By taking this approach, gaining the confidence of his interlocutors and asking them detailed questions in a nonstructured way, he was able to uncover empirically the circumstances that give rise to wage rigidity. He found that the executives were averse to cutting wages of either current employees or new hires, even during the economic downturn when demand for their products fell sharply. They believed that cutting wages would hurt morale, which they felt was critical in gaining the cooperation of their employees and in convincing them to internalize the managers' objectives for the company. Bewley's findings contradict most theories of wage rigidity and provide fascinating insights into the problems businesses face that prevent labor markets from clearing. Table of Contents: Acknowledgments 1. Introduction 2. Methods 3. Time and Location 4. Morale 5. Company Risk Aversion 6. Internal Pay Structure 7. External Pay Structure 8. The Shirking Theory 9. The Pay of New Hires in the Primary Sector 10. Raises 11. Resistance to Pay Reduction 12. Experiences with Pay Reduction 13. Layoffs 14. Severance Benefits 15. Hiring 16. Voluntary Turnover 17. The Secondary Sector 18. The Unemployed 19. Information, Wage Rigidity, and Labor Negotiations 20. Existing Theories 21. Remarks on Theory 22. Whereto from Here? Notes References Index Reviews of this book: In Why Wages Don't Fall During A Recession, [Truman Bewley] tackles one of the oldest, and most controversial, puzzles in economics: why nominal wages rarely fall (and real wages do not fall enough) when unemployment is high. But he does so in a novel way, through interviews with over 300 businessmen, union leaders, job recruiters and unemployment counsellors in the north-eastern United States during the early 1990s recession...Mr. Bewley concludes that employers resist pay cuts largely because the savings from lower wages are usually outweighed by the cost of denting workers' morale: pay cuts hit workers' standard of living and lower their self-esteem. Falling morale raises staff turnover and reduces productivity...Mr. Bewley's theory has some interesting implications...[and] has a ring of truth to it. --The Economist Reviews of this book: This contribution to the growing literature on behavioral macroeconomics threatens to disturb the tranquil state of macroeconomic theory that has prevailed in recent years...Bewley's argument will be hard for conventional macroeconomists to ignore, partly because of the extraordinary thoroughness and honesty with which he evidently conducted his investigation, and the sheer volume of evidence he provides...Although Bewley's work will not settle the substantive debates related to wage rigidity, it is likely to have a profound influence on the way macroeconomists construct models. In particular, the concepts of morale, fairness, and money illusion are almost certain to play a big role in macroeconomic theory. His demonstration that there exist in reality simple, robust behavioral patters that cannot plausibly be founded on traditional maximizing behabior also raises the prospect of a more empirically oriented, more behavioral macroeconomics in the future. --Peter Howitt, journal of Economic Literature Reviews of this book: I think any scholar interested in labour markets and wage determination should read this well-written, lively, and highly stimulating book...[It] provides a fresh view and a lot of complementary background knowledge about how experienced people in the field see the employment relationship and what is actually crucial. Knowledge of this sort is all too rare in economics, and Truman Bewley's truly impressive study can serve as a role model for future investigations. --Simon G'chter, Journal of Institutional and Theoretical Economics To call this book a breath of fresh air is an understatement. The direct insights are fascinating, and Truman Bewley's use of them is sharp and insightful. Labor economists and macroeconomists have a lot to think about. --Robert M. Solow, Nobel Laureate, Institute Professor of Economics, Emeritus, Massachusetts Institute of Technology Truman Bewley set out to conduct a handful of interviews with business executives to gain some theoretical inspiration, and his project blossomed into over 300 interviews with business people, labor leaders and consultants. He is truly the accidental interviewer of economics. Time and again, he found that workers behave like people, not atomistic, selfish economic agents. His insights will engage and enrage economic theorists and empiricists for years to come. --Alan Krueger, Bendheim Professor of Economics and Public Affairs, Princeton University

Author: Orley Ashenfelter
Publisher: Elsevier
ISBN: 9780444878571
Category : Labor economics
Languages : en
Pages : 514

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Annotation The Handbook brings together a systematic review of the research topics, empirical findings, and methods that comprise modern labor economics. It serves as an introduction to what has been done in this field, while at the same time indicating possible future trends which will be important in both spheres of public and private decision-making. Part 1 is concerned with the classic topics of labor supply and demand, the size and nature of the elasticities between the two, and their impact on the wage structure. This analysis touches on two fundamental questions: what are the sources of income inequality, and what are the disincentive effects of attempts to produce a more equal income distribution? The papers in Part II proceed from the common observation that the dissimilarity in worker skills and employer demands often tempers the outcomes that would be expected in frictionless labor markets. And the last section of the Handbook deals explicitly with the role of institutional structures (e.g. trade unions) that now form an important part of modern labor economics.

Author: David M. G. Newbery
Publisher:
ISBN:
Category : Contracts
Languages : en
Pages : 60

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Author: K. Vela Velupillai
Publisher: Routledge
ISBN: 1134358717
Category : Business & Economics
Languages : en
Pages : 328

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Jean-Paul Fitoussi needs no introduction as one of the world's foremost Macroeconomists of his generation. This celebration of his work includes contributions from Nobel Prize - winning economists Robert W. Clower and Robert Solow as well as Olivier Blanchard and leading economic theorist, Edmond Malinvaud.

Author: Andrew Weiss
Publisher: Princeton University Press
ISBN: 140086206X
Category : Political Science
Languages : en
Pages : 126

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Known for his seminal work in efficiency-wage theory, Andrew Weiss surveys recent research in the field and presents new results. He shows how wage schedules affect the kinds of workers a firm employs and how well those workers perform on the job. Using straightforward examples, he demonstrates how efficiency-wage theory can explain labor market outcomes and guide government policy. There is a separate section of applications to less developed countries. "Efficiency-wage models represent one of the most important developments in economic theory of recent years. They have, at last, provided integrated explanations both of macroeconomic phenomena, such as unemployment and wage rigidity, and microeconomic phenomena, such as wage dispersion. Weiss--one of the pioneers of efficiency-wage theory--provides here a masterful survey, a lucid and systematic and yet critical account of this rapidly developing branch of economics. This book should be required reading in all courses in macroeconomics."--Joseph Stiglitz, Stanford University "Efficiency Wages should be on the bookshelf of all labor and macroeconomists."--Lawrence H. Summers, Harvard University "A splendid monograph ... most readable... I will put it on my reading list."--Partha Dasgupta, Stanford University Originally published in 1991. The Princeton Legacy Library uses the latest print-on-demand technology to again make available previously out-of-print books from the distinguished backlist of Princeton University Press. These editions preserve the original texts of these important books while presenting them in durable paperback and hardcover editions. The goal of the Princeton Legacy Library is to vastly increase access to the rich scholarly heritage found in the thousands of books published by Princeton University Press since its founding in 1905.

Author: N. Gregory Mankiw
Publisher: MIT Press
ISBN: 9780262631341
Category : Business & Economics
Languages : en
Pages : 468

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New keynesian economics/ed. by N. Gregory Mankiw.-v.1

Author: David Currie
Publisher: Routledge
ISBN: 1317214889
Category : Business & Economics
Languages : en
Pages : 379

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First published in 1981, this book brings together a collection of essays on microeconomics and development presented at the conference of the Association of University Teachers of Economics. Topics covered include the intergenerational transfer of economic inequality, a review of the recent development in the theory of equity in the economy’s distribution and production process, labour and unemployment, market structure and international trade, taxation and the public sector, Third World industrialisation and Indian agriculture. This book will be of interest to students of Economics and Development Studies.