The theoretical importance of wage and price rigidity. (Akerlof and
Yellen (1985), Caplin and Spulber (1998), Grandmont (1989).)
Evidence on rigidity. (Bewley (1999), Section 1.1. Bils and Klenow (2001). Carlton (1986).)
Theories of wage and price rigidity. (Bewley (1999), Section 1.4,
Blinder (1998), Chapter 2.
Reasons for wage rigidity - morale, internal and external pay
structure. (Bewley (1999), Sections 4.1-4.6, 6.1-6.5, 7.1-7.5.)
Reasons for wage rigidity and for having layoffs rather than wage cuts.
(Bewley (1999), Sections 11.1-11.4.)
Price formation and rigidity. (Blinder (1998), pages 302-309.)
This lecture will be largely based on field research by the instructor that is still
in progress and has not been written up.
Akerlof, George A. and Janet Yellen, 1985, "Can Small Deviations
from Rationality make Significant Differences to Economic Equilibria?" American
Economic Review, 75, 708-720.
Bewley, Truman F., 1999, Why Wages don’t Fall During a
Recession. Cambridge, MA: Harvard Univ. ress, Sections 1.4, 4.1-4.6, 6.1-6.5, 7.1-7.5,
11.1-11.4.
Bils, Mark and Peter J. Klenow, 2002, "Some Evidence on the
Importance of Sticky Prices," http://www.klenow.com/StickyPrices.pdf
Blinder, Alan, et al. 1998, Asking about Prices. New York:
Russell Sage, Chapters 2 and pages 302-309.
Caplin, Andrew S. And Daniel F. Spulber, 1987, "Menu Costs and
the Neutrality of Money," Quarterly Journal of Economics, 102, (November),
703-25.
Carlton, Dennis W., 1986, "The Rigidity of Prices," American
Economic Review, 76, (September), 637-58.
Grandmont, Jean-Michel, 1989, "Keynesian Issues and Economic Theory," Scandinavian Journal of Economics, 91, 265-93.