Template-Type: ReDIF-Paper 1.0
Title: Incomplete Information Bargaining And Business Cycles
Author-Name: D. Acemoglu
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Abstract: This paper presents a one-sided incomplete (asymmetric) information bargaining game in a dynamic general equilibrium framework.  The model predicts business cycle movements in the economy with persistence mechanism arising from asymmetric information and search.  The employment level is procyclical without the help of unusually high values of intertemporal elasticity of substitution, the real wage is procyclical but rigid.  In addition, quits are procyclical and lay-offs countercyclical.  Even if relevant information is revealed by the aggregate price level, the qualitative properties of the model do not change.
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Creation-Date: 1992-01
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Publication-Status: discussion Paper
Price: Price on inquiry
Handle: RePEc:cep:cepdps:0060






