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On the Relationships between Wages, Prices, and Economic Activity

Edward Knotek () and Saeed Zaman

Economic Commentary, 2014, issue Aug

Abstract: We take a closer look at the connections between wages, prices, and economic activity. We find that causal relationships between wages and prices are difficult to identify, and the ability of wages to help predict future inflation is limited. Wages appear to be useful in assessing the current state of labor markets, but they are not necessarily sufficient for thinking about where the economy and inflation are going.

Date: 2014
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