Wage indexation and the monetary policy regime

Selien De Schryder, Gert Peersman () and Joris Wauters

Journal of Macroeconomics, 2020, vol. 63, issue C

Abstract: We estimate a New Keynesian wage Phillips curve for a panel of 24 OECD countries and allow the degree of wage indexation to past inflation to vary according to structural characteristics. We find that the degree of wage indexation is significantly lower for countries with an inflation target. However, this effect vanishes when we control for the degree of goods market competition. By contrast, more goods market competition is consistently associated with lower wage indexation. This robust finding puts into question whether embedding a constant degree of wage indexation in standard DSGE models is truly structural.

Keywords: Wage indexation; Monetary policy regimes; Cross-country panel; Phillips curve (search for similar items in EconPapers)
JEL-codes: C23 E42 J30 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0164070418304786
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Wage Indexation and the Monetary Policy Regime (2014)
Working Paper: WAGE INDEXATION AND THE MONETARY POLICY REGIME (2014)
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:eee:jmacro:v:63:y:2020:i:c:s0164070418304786

DOI: 10.1016/j.jmacro.2019.103166

Access Statistics for this article

Journal of Macroeconomics is currently edited by Douglas McMillin and Theodore Palivos

More articles in Journal of Macroeconomics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().