Monetary shocks with nominal wage stickiness and variable effort

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Title: Monetary shocks with nominal wage stickiness and variable effort
Authors: Walsh, Frank
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Date: Nov-2000
Abstract: Wallers (1989) model which incorporates an effort augmented production function into a traditional Keynesian analysis of supply and demand shocks is generalised by not restricting the elasticity of substitution between effort and employment to be unity. This significantly changes the results in that unanticipated monetary shocks will affect output and indexing real wages will increase the variation of output in response to supply shocks. Involuntary unemployment is not necessary for demand shocks to affect employment and output in this model.
Type of material: Working Paper
Publisher: University College Dublin. School of Economics
Copyright (published version): UCD School of Economics 2000
Subject LCSH: Efficiency wage theory
Labor market
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Language: en
Status of Item: Not peer reviewed
Appears in Collections:Economics Working Papers & Policy Papers

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