Relative Wage Variability: Monetary Policy and the Labor Market

Martin Schmidt

Eastern Economic Journal, 2000, vol. 26, issue 4, 439-454

Abstract: By explicitly examining the symmetry assumption implicit in much of the efficiency wage literature, a plausible supply-side link between monetary policy and worker productivity is introduced. Specifically, if relative wages influence worker behavior asymmetrically and monetary policy alters relative wages, then monetary policy may ultimately affect productivity. The paper reports evidence consistent with both linkages and, therefore, the monetary authority should concern itself not only with demand-side implications, but also with the additional supply-side consideration.

Keywords: Efficiency Wage; Labor Markets; Monetary Policy; Monetary; Policy; Supply; Wage (search for similar items in EconPapers)
JEL-codes: E52 J31 J41 (search for similar items in EconPapers)
Date: 2000
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eej:eeconj:v:26:y:2000:i:4:p:439-454

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