Nonlinear Labor Market Dynamics Book

Introduction.- Nonlinear and Chaotic Economic Dynamics.- Earlier models revisited.- Interaction and irregular dynamics; Overlapping generations and endogenous cycles; Growth models; The role of expectations; Evidence on chaos in economic dynamics.- Tests for nonlinearities and chaos; Results; Some pitfalls and shortcomings; Nonlinear Labor Supply and Real Wage Adjustment.- Beyond a linear and upward sloping labor supply.- Stable preferences, budget constraints, and the supply of labor; Labor supply and path dependent preferences; Empirical labor supply elasticities; A bare-bones model and labor market equilibria.- Adjustment dynamics.- Case 1 - Labor supply bends backwards; Case 2 - An upward sloping labor supply curve with an upper bound; How well is the calibration?.- An unstable Phillips curve and other policy implicatios.- Real Wage Adjustment with a Nonlinear Labor Demand.- Production functions, labor costs, and the demand for labor.- Labor demand and varying mark-ups; Feedback from employment on labor costs; The production technology; Discontinuous labor demand and labor market equilibria.- Adjustment dynamics.- Case 3 - Real wage adjustment with a non-concave production function; Policy implications.- A Note on Rationality.- Worker Flows and the Occurrence of Endogenous Cycles.- The outflow from unemployment.- Case 4 - Unemployment dynamics with a nonlinear outflow rate; A calibrated version and evidence on worker flows.- Is the natural rate a policy trap?.- Employment Dynamics under Wage Setting.- The wage setting curve.- Can the wage setting curve slope downwards?; A further look at the slope: The role of long term unemployment; A tentative view: employment dynamics in a "hire and fire" economy.- Case 5 - Employment dynamics with a U-shaped wage setting curve; Evidence on the parameters of the model.- Some consequences from flexible labor markets.- Testing for Chaos in German Labor Market Data.-Summary and Concluding Remarks.