Wage Growth, Inflation and the Labor Share

Lisa Barrow and Jason Faberman ()

Chicago Fed Letter, 2015, No 349

Abstract: The recent pattern of nominal wage growth has been a puzzle to economists, researchers and policymakers because it lies well below the trend wage growth predicted by inflation and productivity growth. We show that the difference can be reconciled by accounting for the labor share of output, which has been on a declining trend for the past 15 years.

Keywords: productivity; Inflation; labor markets; wages (search for similar items in EconPapers)
Date: 2015
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