Why US wage and employment behaviour differs from that in Britain and Japan.

Assumes that rigid wages cannot provide the basis for a universally valid theory of the business cycle, because wages are not universally rigid. Section 1) reviews rigid wage models; II) shows that wage flexibility varies from place to place; III) discusses 'ideal' labour market institutions from the standpoint of macro-economic efficiency; IV) compares actual labour market institutions in USA, Japan and UK; V) concludes that 1) wages in Britain and Japan are 5-10 times more responsive to fluctuations in aggregate nominal demand than in the US; 2) the three-year staggered wage contract in US makes wage changes there unresponsive; 3) Japanese labour market institutions are much more like the 'ideal'.-V.S.Mead