What Can We Learn from Asynchronous Wage Changes?

Cynthia Doniger

No 2021-055r1, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: I document eight novel facts about wage changes and provide a theoretical framework to rationalize them. I then illustrate how this new treatment of data and theoretical framework speak to important secular and cyclical features of the macroeconomy. The evidence put forth in this paper, suggests that a theory of wage setting in which wages respond to idiosyncratic competition is an important complement to the more conventional macroeconomic view in which wage rigidity is induced by deliberately divorcing the timing of wage changes from innovations in firms' and workers' opportunities.

Keywords: Labor Contracts; Wage Changes; Job Ladder (search for similar items in EconPapers)
JEL-codes: E24 J33 J41 M52 M55 (search for similar items in EconPapers)
Pages: 48 p.
Date: 2021-08-12, Revised 2022-03-31
New Economics Papers: this item is included in nep-dge, nep-isf, nep-lma and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfe:2021-55

DOI: 10.17016/FEDS.2021.055r1

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