Author: Bank of CanadaPublisher:
ISBN:
Category :
Languages : en
Pages : 28
Book Description
How Rigid are Nominal-Wage Rates? May 2001
Author: Bank of CanadaHow Rigid are Nominal-wage Rates?.
Author: Allan CrawfordHow Rigid are Nominal Wages?
Author: Christoph KnoppikHow Prevalent Is Downward Rigidity in Nominal Wages?
Author: Ekaterina S. JardimPublisher:
ISBN:
Category : Employment (Economic theory)
Languages : en
Pages : 23
Book Description
For more than 80 years, many macroeconomic analyses have been premised on the assumption that workers' nominal wage rates cannot be cut. The U.S. evidence on this assumption has been inconclusive because of distortions from reporting error in household surveys. Following a British literature, we reconsider the issue with more accurate wage data from the payroll records of most employers in the State of Washington over the period 2005-2015. For every one of the 40 four-quarters-apart periods for which we observe year-to-year wage changes, we find that at least 20 percent of job stayers experience nominal wage reductions.
The Robustness and Real Consequences of Nominal Wage Rigidity
Author: Ernst FehrPublisher:
ISBN:
Category : Unemployment
Languages : en
Pages : 60
Book Description
Evaluating the Economic Significance of Downward Nominal Wage Rigidity
Author: Michael W. L. ElsbyPublisher:
ISBN:
Category : Wages
Languages : en
Pages : 72
Book Description
This paper formalizes and assesses empirically the implications of widely observed evidence for downward nominal wage rigidity (DNWR). It shows how a model of DNWR informed by diverse evidence for worker resistance to nominal wage cuts is nevertheless consistent with weak macroeconomic effects. This occurs because firms have an incentive to compress wage increases as well as wage cuts when DNWR binds. By neglecting potential compression of wage increases, the previous literature may have overstated the costs of DNWR to firms. Using a broad range of micro--data from the US and Great Britain I find that firms do indeed compress wage increases as well as wage cuts at times when DNWR binds. Accounting for this reduces the estimated increase in aggregate wage growth due to DNWR to be much closer to zero, consistent with the predictions of the model. These results suggest that DNWR may not provide a strong argument against the targeting of low inflation rates, as practiced by many monetary authorities. Importantly, though, this result is nevertheless consistent with evidence that suggests workers are averse to nominal wage cuts.
Nominal Wage Rigidity and Real Wage Cyclicality
Author: Marcello M. EstevaoPublisher:
ISBN:
Category : Labor supply
Languages : en
Pages : 26
Book Description
Downward Nominal Wage Rigidity
Author: David E. LebowPublisher:
ISBN:
Category : Inflation (Finance)
Languages : en
Pages : 50
Book Description
The Costs of Price Stability - Downward Nominal Wage Rigidity in Europe
Author: Steinar HoldenPublisher:
ISBN:
Category : Economics
Languages : en
Pages : 60
Book Description
In most European countries, the prevailing terms of employment, including the nominal wage, can only be changed by mutual consent. I show that this feature implies that workers have a strategic advantage in the wage negotiations when they try to prevent a cut in nominal wages. If inflation is so low that some nominal wages have to be cut, the strategic advantage of the workers' induces higher unemployment in equilibrium. The upshot is a long run tradeoff between inflation and unemployment for low levels of inflation. The prediction that low inflation involves higher unemployment in Europe but not in the US, is consistent with previous empirical findings.
Nominal Wage Rigidity and the Rate of Inflation
Author: Stephen NickellPublisher:
ISBN: 9780753014493
Category : Economics
Languages : en
Pages : 21
Book Description