Theoretical and Applied Economics
No. 1 / 2019 (618), Spring
Models and theories in a frictions and wage rigidities labor market
Romanian Court of Accounts, Romania
Dumitru Alexandru BODISLAV
Bucharest University of Economic Studies, Romania
Abstract. Unlike the classic market vision, where demand and supply meet immediately, at no cost, and prices are determined in such a way that demand equals supply, in the real world frictions occur in the searching process, the price offers of one of the parties are considered too high, be it the goods or services market, the real estate market or the labor market, so there are imbalances that vary over time, excess supply or excess demand.
In this paper we aim to present the main models and theories in a labor market characterized by friction and wage rigidity, starting from contributions in the field of “frictions on search-based markets” by Peter A. Diamond, as well as from works belonging to economists Dale T. Mortensen and Christopher A. Pissarides, who developed and adapted the Diamond model to make it applicable to the labor market, thus resulting in one of the most used models for the analysis of unemployment and wage formation.
Contents
Why do high ability people also suffer from money illusion? Experimental evidence of behavioral contradiction
Macroeconomic stability of new member states of the European Union: Fifth enlargement
The global context of economic crises and cohesion funds in the EU
Is real depreciation or more government deficit expansionary? The case of Macedonia
Models and theories in a frictions and wage rigidities labor market
Human capital and the FDI-Income inequality nexus in African countries: Panel smooth transition regression approach
Are institutions a crucial determinant of cross country economic efficiency? A two-stage double bootstrap data envelopment analysis
The relationship between unemployment and some macroeconomic variables: Empirical evidence from India
Inequity in health care sector in India: A case study of district level in four Indian states
Performance in public administration: Doing outside the box under the rule of procedures
Trade effects based on general equilibrium
Empirically testing Keynesian defense burden hypothesis, nonlinear hypothesis, and spillover hypothesis: Evidence from Asian countries