Thanks for the lead.

http://www.nber.org/~rosenbla/econ110-04/lecture/stickywages... [pdf]

Mr Bewley’s theory has some interesting implications. Pay cuts are more likely at firms whose demand for labour is price-sensitive, such as those in highly competitive industries. Since many markets are becoming more competitive, wages may also be getting more flexible—and unemployment may rise less in recessions. Wages are also likely to be less rigid in short-term jobs, where workers do not become attached to their firm.

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Mr Bewley’s book is not the last word on sticky wages. Some of his findings are probably specific to the north-eastern United States in the early 1990s.