Abstract
All the models on real wage adjustment discussed so far referred to a very simple and static market clearing rule. An auctioneer observes the current state of the labor market. If it is in disequilibrium, he decides to vary the real wage proportionately to excess demand and supply. Should labor demand be higher than supply, he will increase real wages, hoping to clear the market. If there is excess supply, the auctioneer decreases the real wage level in a determined relation to the observed disequilibrium quantities
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© 2000 Springer-Verlag Berlin Heidelberg
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Neugart, M. (2000). A note on rationality. In: Nonlinear Labor Market Dynamics. Lecture Notes in Economics and Mathematical Systems, vol 486. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-58348-3_5
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DOI: https://doi.org/10.1007/978-3-642-58348-3_5
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-540-67279-1
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