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Macroeconomic Implications of Labor Contracts
Summary and Conclusions
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agents aggregate assume asymmetric information Azariadis behavior consider constraint consumption contracting approach contracting models contracting practices contracting problem contracts literature degree of indexation depends determined discussion employed workers employment distortions employment levels employment rule enforcement problems equilibrium ex ante ex post expected utility firm's firms are risk Fischer fluctuations function given Hence imperfect information incentive compatibility incentive problems independent indifference curve inefficiencies informational asymmetries labor market labor services layoffs leisure level of employment Lucas 68 macro-contracting models macroeconomic implications marginal product marginal rates market clearing money supply negotiated nominal wage observe optimal contract optimal labor contract output perfect substitutes period preferences profits Proposition random variable rational expectations real shocks realizations reputation effects restrictions risk averse risk neutral risk sharing severance pay severance payments specific spot market strictly increasing Suppose THEORY tions total hours underemployment unemployed we(s worker-firm pair workers and firms worksharing wu(s
Page 71 - Implicit Contracts and Related Topics: A Survey," in The Economics of the Labour Market ed. by Z. Hornstein, et at. London: HMSO, 1981. * Azariadis, C., "Employment with Asymmetric Information," Quarterly Journal of Economics (Supplement), 98 (1983), 157-173.
Page 71 - Equilibrium in a Reinsurance Market," Econometrica, 30 (1962), 424-444. " Branson, W. and J. Rotenberg., "International Adjustment with Wage Rigidity," European Economic Review, 13 (1980), 309-332.  Brown, M. and E. Wolfstetter., "Underemployment and Normal Leisure," Economic Lener*, 15 (1984), 157-163. * Bull, C., "The Existence of Self-Enforcing Implicit Contracts," CV Starr Center, New York University, 1983.
Page 71 - References References marked with a single asterisk denote works essential to an understanding of the field, to which the reader should turn first for a deeper knowledge of the topics covered in this survey. Those marked with a double asterisk are mentioned in the text but not so basic to the field. All the references listed are mentioned at some point in the text of this survey. ** Austen-Smith, David, "The Spatial Theory of Electoral Competition: Instability, Institutions, and Information,"...