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By Pierre-Richard Agenor, Alejandro Izquierdo, Henning Tarp Jensen

Pierre-Richard Agenor's pioneering paintings on built-in Macroeconomics types for Poverty research (IMMPA) is cataloged for the 1st time during this must-read volume.A type of dynamic computable common equilibrium types, IMMPA versions are designed to investigate the influence of adjustment guidelines on unemployment and poverty within the constructing global. together with either papers initially circulated throughout the global financial institution, in addition to new fabric that locations this crucial paintings in its higher context, Adjustment regulations, Poverty, and Unemployment info the background and makes use of of those versions thus far, in addition to pointing to destiny advancements for his or her usage.

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In practice, wage indexation is often ex post, with current wages adjusting to past changes in prices. Fischer (1988) examined the role of ex post wage indexation in the conduct of disinflation programs. See Agénor (1996) for a further discussion. 15 See Dornbusch, Sturzenegger, and Wolf (1990), and Parkin (1991). AGENOR: “CHAP01” — 2006/11/9 — 12:35 — PAGE 19 — #12 20 Chapter 1 have enacted legislation aimed at either curbing wage indexation or at changing the mechanisms through which wages are indexed.

34 Profits are given by S α − wS S − cqS.

AGENOR: “CHAP01” — 2006/11/9 — 12:35 — PAGE 33 — #26 34 Chapter 1 case effort can be specified as a convex function of unemployment. By introducing unemployment in the effort function, a feedback effect is also introduced in the behavior of wages: an increase in unemployment would tend to lower wages. Thus, in contrast to the Phillips curve, efficiency-wage models explain a relationship between the level of real wages and unemployment, as opposed to a relationship between the growth rate of wages and unemployment.

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