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- W3122083875 abstract "Abstract This paper considers two alternative approaches to stabilizing an economy with firm-specific productivity disturbances. The first uses wage contracts tying wages in each firm to these disturbances as well as the price level. The second uses a taxation scheme together with a wage indexation rule tying wages to prices alone. Both these schemes are viable as long as the firm-specific disturbance is known to all agents. If the firm alone observes the productivity disturbance, under either scheme it has an incentive to misrepresent current conditions. However, a combination of these two schemes is both welfare maximizing and incentive compatible." @default.
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- W3122083875 date "1985-11-01" @default.
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- W3122083875 title "Macroeconomic stabilization through taxation and indexation: The use of firm-specific information" @default.
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- W3122083875 doi "https://doi.org/10.1016/0304-3932(85)90042-x" @default.
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