This program focuses on the interface between insights from labor economics and the functioning of the aggregate economy. The nature and origin of nominal and real wage adjustment over the cycle remains an important open question for the modeling of both open and closed economies, as well as understanding the speed at which labor markets adjust to demand and supply shocks. Understanding the effects of labor market regulations and their complementarity with frictions in product and financial markets on productivity and macroeconomic dynamics also constitute an important research objective of this program.

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