Real wages, inflation and labour productivity in Australia

Saten Kumar, Don Webber and Geoff Perry
Additional contact information
Saten Kumar: Department of Business Economics, Auckland University of Technology
Geoff Perry: Department of Business Economics, Auckland University of Technology

No 921, Working Papers from Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol

Abstract: This paper presents an analysis of real wages, inflation and labour productivity interrelationships using cointegration, Granger-causality and, most importantly, structural change tests. Applications of tests to Australian data over the 1965-2007 period corroborate the presence of a structural break in 1985 and show that a 1 percent increase in manufacturing sector real wages led to an increase in manufacturing sector productivity of between 0.5 and 0.8 percent. Comparable estimates for the effect of inflation on manufacturing sector productivity have limited statistical significance. Granger causality test results suggest that real wages and inflation both Granger-cause productivity in the long run.

Keywords: Labour productivity; Real wages; Inflation; Cointegration; Granger causality (search for similar items in EconPapers)
JEL-codes: C50 E23 (search for similar items in EconPapers)
Pages: 15 pages
Date: 2009-12
New Economics Papers: this item is included in nep-eff and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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http://carecon.org.uk/DPs/0921.pdf First version, 2009 (application/pdf)

Related works:
Journal Article: Real wages, inflation and labour productivity in Australia (2012)
Working Paper: Real Wages, Inflation and Labour Productivity in Australia (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:uwe:wpaper:0921

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