Fixed-Wage Contracts and Monetary Non-neutrality

Maria Björklund, Mikael Carlsson and Oskar Skans

American Economic Journal: Macroeconomics, 2019, vol. 11, issue 2, 171-92

Abstract: We study the importance of wage rigidities for the monetary policy transmission mechanism. Using uniquely rich micro data on Swedish wage negotiations, we isolate periods when the labor market is covered by fixed-wage contracts. Importantly, negotiations are coordinated in time but their seasonal patterns are far from deterministic. Using a two-regime VAR model, we document that monetary policy shocks have a larger impact on production during fixed-wage episodes as compared to the average response. The results do not seem to be driven by the periodic structure, nor the seasonality, of the renegotiation episodes.

JEL-codes: E23 E24 E52 J31 J41 (search for similar items in EconPapers)
Date: 2019
Note: DOI: 10.1257/mac.20160213
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Citations: View citations in EconPapers (10)

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Related works:
Working Paper: Fixed Wage Contracts and Monetary Non-Neutrality (2019)
Working Paper: Fixed wage contracts and monetary non-neutrality (2016)
Working Paper: Fixed Wage Contracts and Monetary Non-Neutrality (2016)
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