Evolutionary Dynamics of Labor Contracting in a Macroeconomy: A Simulation Study

摘要

"Stick" pricing is commonly recognized to be the bane of macroeconomics. It is almost tautological to say that if all prices were free to move simultaneously to microeconomically efficient market-clearing levels, the macroeconomy too would clear. Labor markets represent a venue where this is particularly unlikely to happen, due to the long-term nature of the bargains to be struck and the large investment in firm-specific human capital that follows. Such institutional peculiarities make it unlikely that labor will ever be traded in a smoothly functioning spot market, and even if all other markets could clear smoothly, labor markets account for over two-thirds of factor incomes and are easily large enough to produce serious economic instability on their own. However, some economists have exercised their imaginations to devise long-term "profit-sharing" contract forms with short-term properties more closely approximating those of spot markets. The present simulation model investigates whether such contracts might come into widespread use through evolutionary means alone.