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We formulate nominal wage adjustment by incorporating various concepts of fairness. By applying it into a continuous-time money-in-utility model we examine macroeconomic dynamics with and without a liquidity trap and obtain the condition for persistent unemployment, and that for temporary unemployment, to occur. These conditions turn out to be critical, since policy implications significantly d...
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ژورنال
عنوان ژورنال: Nature
سال: 1980
ISSN: 0028-0836,1476-4687
DOI: 10.1038/286197b0