Article: article from journal or magazin.
Efficiency wages revisited: The internal reference perspective
The missing wage rigidity in general equilibrium models of efficiency wages is an artifact of the external wage reference perspective conventionally adopted by the literature. Efficiency wage models based on an internal perspective, in which the wage reference is made dependent on the firm's ability to pay, are capable of generating strong wage rigidity. This paper makes the point in the context of the gift-exchange framework originally proposed by Akerlof .
Efficiency wages, Wage rigidity, Rent sharing
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