Time variation in U.S. wage dynamics

Boris Hofmann, Gert Peersman () and Roland Straub

Journal of Monetary Economics, 2012, vol. 59, issue 8, 769-783

Abstract: Supply and demand shocks had much stronger long-run effects on nominal wages and prices during the “Great Inflation”. For supply shocks, there is even a sign switch in the nominal wage response. Before and after the “Great Inflation”, nominal wages moved in the same direction as real wages and in the opposite direction of the price level, whereas nominal wages and prices moved in the same direction at longer horizons after the shock in the 1970s. Estimation of a DSGE model shows that these results reflect changes in the degree of wage indexation over time, which was considerably higher during the “Great Inflation”.

Date: 2012
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Related works:
Working Paper: Time Variation in U.S. Wage Dynamics (2011)
Working Paper: Time Variation in U.S. Wage Dynamics (2010)
Working Paper: Time variation in U.S. wage dynamics (2010)
Working Paper: Time Variation in U.S. Wage Dynamics (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:59:y:2012:i:8:p:769-783

DOI: 10.1016/j.jmoneco.2012.10.009

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