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Working Paper

Magnification Effects and Acyclical Real Wages

An analysis of a one-period, two-sector model in which firms must pay a fixed cost of hiring. The authors show that this type of model results in more employment variability and less-procyclical wages than do models without fixed hiring costs.

Suggested Citation

Carlstrom, Charles T., and Edward Gamber. 1991. “Magnification Effects and Acyclical Real Wages.” Federal Reserve Bank of Cleveland, Working Paper No. 91-05.