How do people view wage and price inflation?

Monica Jain, Olena Kostyshyna and Xu Zhang

Journal of Monetary Economics, 2024, vol. 145, issue C

Abstract: Using household-level data from the Canadian Survey of Consumer Expectations over 2014Q4–2023Q2, we study wage growth expectations and their link with inflation expectations. We document novel facts about wage growth expectations and the uncertainty around them. Households associate higher wage growth with a stronger economy. The link between wage and inflation expectations is weak, but stronger during the high-inflation period, in tighter labour markets, among new hires, for workers with above-inflation wage gains or higher levels of education or income. Uncertainty about wage gains is strongly positively linked to uncertainty about expected inflation, particularly during the high-inflation period.

Keywords: Wage expectations; Inflation expectations; Uncertainty; Consumer surveys; Wage-price spiral (search for similar items in EconPapers)
JEL-codes: C83 D84 E21 E24 E31 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:145:y:2024:i:c:s0304393224000059

DOI: 10.1016/j.jmoneco.2024.01.005

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