Wage Growth When Inflation Is High

Oscar Jorda, Celeste Liu, Fernanda Nechio and Fabián Rivera-Reyes

FRBSF Economic Letter, 2022, vol. 2022, issue 25, 6

Abstract: In a tight labor market, workers are able to respond to price increases by bargaining for higher wages. Analyzing conditions since the pandemic shows that, in the recent environment of elevated inflation and low unemployment, wages have become much more sensitive to expected price inflation than in the past. The impact of inflation expectations on wages also appears to have become longer lasting.

Keywords: wage growth; price inflation; inflation expectations; unemployment; covid19 (search for similar items in EconPapers)
Date: 2022
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