Recent Developments in the Linkage between Wages and Prices

Tatsuya Ozaki, Masahiro Jimbo, Tomoyuki Yagi and Akihito Yoshii
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Tatsuya Ozaki: Bank of Japan
Masahiro Jimbo: Bank of Japan
Tomoyuki Yagi: Bank of Japan
Akihito Yoshii: Bank of Japan

No 24-E-2, Bank of Japan Review Series from Bank of Japan

Abstract: The prices of many items making up the CPI are affected by past significant fluctuations in import prices. As a result, it is not easy to identify upward pressure on prices stemming from the linkage between wages and prices. In this article, a number of different approaches are used to quantitatively measure the linkage between wages and prices. Results of analyses based on cost structures of items making up the CPI and analyses using time-series models suggest that moves to reflect wage increases in output prices are gradually spreading. It is important to determine developments in the linkage between wages and prices by continuously carrying out quantitative analyses from various standpoints including those approaches taken in this article, as well as by conducting qualitative analyses, such as interviews with firms, carefully.

Keywords: Consumer prices; Wage; Pass-Through; Time-varying parameter VAR (search for similar items in EconPapers)
JEL-codes: C32 E30 E31 (search for similar items in EconPapers)
Date: 2024-05-10
New Economics Papers: this item is included in nep-mon
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