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Fixed-Wage Contracts and Monetary Non-neutrality

By Maria Björklund, Mikael Carlsson, and Oskar Nordström Skans

American Economic Journal: Macroeconomics, April 2019

We study the importance of wage rigidities for the monetary policy transmission mechanism. Using uniquely rich micro data on Swedish wage negotiations, we isolate periods when the labor market is covered by fixed-wage contracts. Importantly, negotiations ...

Policies in Relational Contracts

By Daniel Barron and Michael Powell

American Economic Journal: Microeconomics, May 2019

We consider how a firm's policies constrain its relational contracts. A policy is a sequence of decisions made by a principal; each decision determines how agents' efforts affect their outputs. We consider surplus-maximizing policies in a flexible dynamic...