A dynamic linear demand schedule for labor is estimated and tested. The hypothesis of rational expectations and assumptions about the orders of the Markov processes governing technology impose over-identifying restrictions on a vector autoregression for straight-time employment, overtime employment, and the real wage. The model is estimated by the full information maximum likelihood method. The model is used as a vehicle for re-examining some of the paradoxical cyclical behavior of real wages described in the famous Dunlop-Tarshis-Keynes exchange.
Published In: Labor economics
(Vol. 1, 1995, pp. 209-244)
Published In: Dynamic labor demand and adjustment costs
(1992, pp. 106-141)
Published In: Journal of Political Economy
(Vol. 86, No. 6, December 1978, pp. 1009-1044) https://doi.org/10.1086/260726
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