An efficiency wage - imperfect information model of the aggregate supply curve

This study derives a reduced-form equation for the aggregate supply curve from a model in which firms pay efficiency wages and workers have imperfect information about average wages at other firms. If specific assumptions are made about workers’ expectations of average wages and about aggregate demand, the model predicts how the aggregate demand and supply curves shift and how output and prices adjust in response to demand shocks and supply shocks. The model also provides an alternative explanation for Lucas’ (1973) finding that the AS curve is steeper in countries with greater inflation variability.Aggregate supply curve; efficiency wages; imperfect information

The impact of evolving labor practices and demographics on U.S. inflation and unemployment

Since the early 1990s, NAIRU estimates have declined and unemployment duration has risen relative to the unemployment rate. These developments may have arisen from the aging of the workforce or practices reducing job turnover. We assess the internal consistency of these hypotheses using simulation methods and test their external consistency using modified NAIRU models. We find that demographics cannot fully account for changes in the NAIRU, consistent with Staiger, Stock, and Watson (2001) and in contrast to Shimer (1998, 2001). Instead, our results attribute shifts in the NAIRU and duration to a combination of shifts in demographics and job turnover.

A Model of the Determinants of Effort

This study derives an expression for effort from utility-maximizing behavior on the part of workers, whose utility depends on consumption, effort, and the ratio between their wage and their perceived fair wage. Unlike many shirking models, this study treats effort as a continuous variable rather than as a dichotomous choice. Effort is shown to depend on wages at a worker's current firm, wages at other firms, the ratio between a worker's wage and perceived fair wage, unemployment benefits, the unemployment rate, and the firm's monitoring intensity

Do Firms Pay Efficiency Wages? Evidence with Data at the Firm Level

This study tests the efficiency wage hypothesis by estimating wage and quit equations with data from the Employment Opportunity Pilot Project survey of firms. An efficiency wage model is derived that predicts effects of turnover costs and unemployment on wages as functions of first and second derivatives from the quit equation. The model is tested by examining the relationships between the coefficients in the wage and quit equations; the results are generally favorable to efficiency wage theory. Other important findings are that firm characteristics raising workers' productivity tend to raise wages and that a rise in turnover costs reduces quits

Performance of Several Method-of-Characteristics Exhaust Nozzles

Nozzle performance data were obtained with three "method-of-characteristics" nozzles and a 150 conical nozzle at pressure ratios up to 130. Each basic configuration was cut off and tested at expansion ratios of 25, 20, 15, and 10. Unheated dry air was used at nozzle inlet pressures up to 22,000 pounds per square foot absolute. Nozzle thrust data were extrapolated to infinite pressure ratio (zero discharge pressure). As much as 1-percent increase in thrust with no increase in nozzle surface area (weight), can be obtained by using a method-of-characteristics, nozzle instead of a 15 conical nozzle when operating with a nozzle expansion ratio of 25 and nozzle pressure ratios from 200 to infinity. Conversely, for the same thrust, reductions in nozzle divergent surface area in the order of 25 percent are possible. The thrust performance of the method-of-characteristics nozzle was not as good as that of the 150 conical nozzle when operating at pressure ratios considerably below design (below 100 for the expansion ratio 25 nozzles). Theoretical and measured nozzle momentum coefficients agreed within about 0.6 percent. This is the order of accuracy of both the measured and theoretical values

An efficiency wage - imperfect information model of the aggregate supply curve

This study derives a reduced-form equation for the aggregate supply curve from a model in which firms pay efficiency wages and workers have imperfect information about average wages at other firms. If specific assumptions are made about workers’ expectations of average wages and about aggregate demand, the model predicts how the aggregate demand and supply curves shift and how output and prices adjust in response to demand shocks and supply shocks. The model also provides an alternative explanation for Lucas’ (1973) finding that the AS curve is steeper in countries with greater inflation variability

The formation of wage expectations in the effort and quit decisions of workers

While much work in macroeconomics considers the formation of price expectations, there has been relatively little work analyzing wage expectations. This study develops models in which workers form expectations of average wages in choosing levels of effort and on-the-job search, under the assumption that information on lagged average wages is free but other information is costly. Under reasonable conditions, workers’ expectations are likely to be at least partly adaptive. It is argued that wage expectations may be more important than price expectations in explaining unemployment fluctuations

An Efficiency Wage Approach to Reconciling the Wage Curve and the Phillips Curve

This study develops an efficiency wage model that generates a wage curve at the regional level and a Phillips curve at the national level, under the assumption that workers' efficiency depends on both regional and aggregate labor market conditions. An equation relating wages to unemployment and lagged wages is derived from the profit-maximizing behavior of firms, and it is demonstrated that the coefficient on lagged wages is less than 1 with regional data but equals 1 with aggregate data. In addition, there is an equilibrium relationship between unemployment and wages at the regional level, but not at the aggregate level

Impact-ionization and noise characteristics of thin III-V avalanche photodiodes

It is, by now, well known that McIntyre\u27s localized carrier-multiplication theory cannot explain the suppression of excess noise factor observed in avalanche photodiodes (APDs) that make use of thin multiplication regions. We demonstrate that a carrier multiplication model that incorporates the effects of dead space, as developed earlier by Hayat et al. provides excellent agreement with the impact-ionization and noise characteristics of thin InP, In/sub 0.52/Al/sub 0.48/As, GaAs, and Al/sub 0.2/Ga/sub 0.8/As APDs, with multiplication regions of different widths. We outline a general technique that facilitates the calculation of ionization coefficients for carriers that have traveled a distance exceeding the dead space (enabled carriers), directly from experimental excess-noise-factor data. These coefficients depend on the electric field in exponential fashion and are independent of multiplication width, as expected on physical grounds. The procedure for obtaining the ionization coefficients is used in conjunction with the dead-space-multiplication theory (DSMT) to predict excess noise factor versus mean-gain curves that are in excellent accord with experimental data for thin III-V APDs, for all multiplication-region widths