The Normalization of Wage Dynamics

Takeo Hoshi and Anil K. Kashyap

Asian Economic Policy Review, 2025, vol. 20, issue 2, 237-246

Abstract: In an article published in 2021, Hoshi and Kashyap find that the link between wage inflation and labor market conditions in Japan changed starting in the late 1990s. The link between wage inflation and price inflation also disappeared around the same time. Two factors were identified as the main reasons why wages became less sensitive to the tightness of the labor market: firms' labor hoarding of full‐time workers and an increasing reliance on newly hired part‐time workers. Both of these factors started to disappear by the late 2010s. After re‐confirming the main results in the 2021 article by Hoshi and Kashyap, this paper finds that wage inflation has become sensitive to the unemployment rate (an important labor indicator). We also find weak evidence that the link between wage inflation and price inflation might be re‐emerging.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/aepr.12503

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:asiapr:v:20:y:2025:i:2:p:237-246

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1832-8105

Access Statistics for this article

Asian Economic Policy Review is currently edited by Takatoshi Ito, Akira Kojima, Colin McKenzie and Shujiro Urata

More articles in Asian Economic Policy Review from Japan Center for Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().