Akerlof represents the second wave of morale-centric efficiency-wage theories. It is interesting in that the author overtly abandons the usual rationality assumption, providing some indication of what is gained and lost by muddying motivation.
The Annable paper introduces equity-based reference standards into worker preferences, establishing the most critical pillar for generalized-exchange theory.
This is an early statement of the two-venue (workplace and marketplace) approach to efficiency wage theory. It is surprisingly complete, except for the derivation of meaningful wage rigidity from axiomatic model primitives and the construction of workplace-equilibrium dynamics. Those innovations had to wait for the GEM Project.
This is the authors’ insightful statement of the FWGE School modeling of intermarket spillovers and other Keynesian concepts. Once much cited but now long dormant, the paper reclaims its rightful place as a critical advance in macro thinking with the GEM Project’s microfounding of meaningful wage rigidity and employment rationing.
Chandler’s crucial linkage of scale economies, corporations, and the jump in global living standards forced the Second Industrial Revolution into a starring role in the development of stabilization-relevant macroeconomics.
This paper introduced the important dual-decision hypothesis into macro theory.
In 1937, Coase pioneered the modeling of the rational boundaries between exchange conducted in the marketplace and in the firm, a truly foundational piece that has never been adequately recognized by macro theorists.
Kerr, Dunlop, and their on-site labor economist colleagues assembled all the information needed to support the generalization of rational exchange from the marketplace to the workplace.
This paper properly placed wage rigidity at the core of usable macroeconomics.
Had he not died young, Okun was a good bet to have generalized rational exchange from the marketplace to the workplace early enough to have short-circuited the 30-year macro methodology war. Much misdirected research would have been avoided.
Patinkin constructed a great deal of stabilization-relevant macro theory on the assumption of a fixed wage. With the GEM Project’s derivation of meaningful wage rigidity, his book must be again recognized as one of the great works of macroeconomics.
Truly needing no introduction, this empirical paper induced a tidal-wave of debate that resisted resolution until the final word on the Phillips Curve provided in the GEM Project.
This is an early paper in Simon’s extraordinary construction of organization theory, containing massive information about what goes on in large, specialized corporations. An extremely important paper.
Cited here because for most economists the Shapiro-Stiglitz paper is efficiency-wage theory, the article represents the application of shirking on the job and the likelihood of punishment to modeling wage determination. It turns out to be a small idea that has little stabilization relevance. Firing for cause is a negligible source of involuntary job loss.
This paper establishes Solow as the co-founder, along with Annable (1977, 1980), of efficiency-wage theory.