Externalities from Contract Length
分析企业劳动合同期限延长如何导致总体价格刚性，进而影响其他企业的就业波动，发现分散经济中的均衡合同期限过长，存在负外部性。
An increase in the length of a firm's labor contract contributes to rigidity in the aggregate price level. This increases the variance of aggregate demand but decreases the variance of other firms' real wages. Under certain conditions, the net effect is to increase the variance of other firms' employment. This negative externality implies that the equilibrium contract length in a decentralized economy is greater than the social optimum-in other words, wages are too rigid. Copyright 1987 by American Economic Association.