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This book provides an overview and assessment of various theoretical approaches in macroeconomics that focus on wage rigidities and involuntary unemployment. It offers an analysis of the microeconomic foundations of rigid wages and considers their implications for public policy. It reports new findings concerning the theory of fixprice temporary equilibria, and provides an analysis of the microfoundations of inefficiencies in the labor market such as risksharing mechanisms, union behavior and efficiency wage models.
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